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Sam’s Club is one of the divisions of Wal-Mart stores and leading operators of membership warehouse clubs. Sam’s Club runs over 651 clubs across the United States and Puerto Rico and offers various superior services, savings and products to its millions of members across these countries (Brea-Solis et al, 2015). Members of Sam’s Club are offered various products ranging from pharmaceuticals to clothing, groceries and auto supplies. Members are also offered services including car loans, discount credit, travel club, internet, long distance services and mail-order pharmacy. Sam’s Club also extends the sale of its products to restaurants, offices, daycare centers and to individuals (Courtemanche and Carden, 2014).
Sam’s Club was founded by Sam Walton on April 7, 1983 in the Midwest City of Oklahoma in the United States of America (Ghazzawi et al, 2014). Between 1987 and 1993, Sam’s Club made a series of expansions including the purchase of West Monroe, Louisiana-based SuperSaver Wholesale Warehouse Club, an expansion in Delran, New Jersey and the purchase of PACE Membership Warehouse which was converted later into Sam’s Club. Currently, Sam’s Club runs over 450 stores and sells to over 41 million customers (Marcilla, 2017).
Business Strategy of Sam’s Club
One of the business strategies adopted by Sam’s Club to gain competitive advantage is the support that the club offers to small businesses to grow and prosper through its business initiatives, research, philanthropy and engagement of stakeholders (Courtemanche and Carden, 2014). This strategy gives Sam’s Club the opportunity to serve over 500,000 small businesses that are mostly microenterprises. In order to recoup what Sam’s Club has invested, the club adopts mark-up on items over wholesale (Brea-Solis et al, 2015). The club uses this strategy to gain profit and also retain its customers by establishing a ratio between the cost of goods and services produced against its selling price. This strategy enables Sam’s Club to include the total cost of producing goods and services in order to cover all expenses made in doing business and also make profits. Sam’s Club uses this strategy so that a fair price on the production of goods and services can easily be found by its customers.
Development of Sam’s Club
A method of developing Sam’s Club is through a critical analysis of the club using the SWOT analysis. The SWOT analysis will allow Sam’s Club to determine the strength of the services and products of the club, and the weakness of the services and products of the club. These will include high prices or faulty design, the opportunity for the club and the potential threat that the club faces including poor economy which can affect the sale of goods and services of the club (Marcilla, 2017). A comprehensive analysis of SWOT of Sam’s Club is essential in that it will allow the club to identify all internal and external issues of the products and services that have the capacity of increasing the market share of the club or harmful to the operations of the club (Ghazzawi et al, 2014). By default, the club will be able to identify all problems affecting the club and offer solutions to them.
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- Courtemanche, C., & Carden, A. (2014). Competing with Costco and Sam’s Club: Warehouse club entry and grocery prices. Southern Economic Journal, 80(3), 565-585.
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