Nevertheless, this paper will assesses the service outputs supply of Wal-Mart and Costco in the food section, hence identify what the firms offers and their structures.
Wal-Mart and Costco purchase products from manufactures and producers in large quantities and they are gradually broken down as they reach the consumers. The products of high value are squeezed in to small volumes, since it is cost effective to ship to end-customers compared to the cost of shipping a bulkier product (Perner, 1).
Convenience has been identified as a significant factor used to influence the consumer food choices, by Wal-Mart and Costco, since they have changed ways in which the nature of products are provided in grocery stores, and the time consumed to prepare a meal. Wal-Mart focuses on responding to the demand by offering more in-store delis and ready to eat prepared foods such as chicken, salad and sushi, while Costco has introduced an increased selection of frozen and prepared meals for consumers seeking a quick meal from their grocery stores.
Wal-Mart has made a substantial investment in information technology and logistics, which facilitates commitment in taking a risk of placing large orders in advance of customer, needs in order to focus on the reducing the waiting time and delivery time. On the other hand, Costco has developed an efficient distribution system, which is based on its information system and enormous demand, though they have short channels for perishable products. Moreover, Wal-Mart and Costco have to incur additional costs in order to ensure that merchandise is distributed quickly.
Wal-Mart and Costco consolidate goods by carrying a wide assortment of goods from different manufactures to provide a breadth of assortment, whereby their stores carry different kinds of food from different suppliers. In this case, this makes ...Show more