Costco : Advantages Of Financial Aspects Essay

The strategic objective of Costco is based on the concept of offering members very low prices on a limited selection of nationally branded and selected private label products in a wide range of merchandise categories while producing high sales volumes and rapid inventory turnover. This rapid inventory turnover, when combined with the operating efficiencies achieved by volume purchasing, efficient distribution and reduced handling of merchandise in no-frills, self service warehouse facilities, enables Costco to operate profitably at significantly lower gross margins than traditional wholesalers, discount retailers and supermarkets. (1)

Store layout, merchandise display and categorization is superb to facilitate easy tracing / location. Individual store managers have liberty to adjust merchandising mix to suit local taste and placing replenishment orders. Purchasing through central office to get maximum margins, low expense

They are performing very well from a strategic perspective. No, Costco does not enjoy a clear competitive advantage over Sam’s. It does however enjoy a competitive advantage over BJ’s. the nature of this competitive advantage includes the fact that BJ’s has too many products, which makes rapid turnover harder to achieve. I think that Costco has a winning strategy because they are selective with the

The store will provide welcoming, attentive and efficient service. The company will provide a productive work environment, rewards for achievement and opportunities to develop.

Costco Wholesale Corporation operates an international chain of membership warehouses, which carries quality, brand name

Publix is not your quintessential grocery store, it is so much more. What is it about Publix that make it unique from all the other stores that sell groceries? What are its unique selling points that add extra value to a visit? Why are customers willing to pay more to shop there? To quote Publix President, Todd Jones, “We believe that there are three ways to differentiate: service, quality and price. You’ve got to be good at two and the best at one. We make service our number one, then quality and then price” (Jones, 2013).

Chief elements of Costco’s strategy were low prices, limited selection, and a treasure-hunt shopping environment. The ultra-low pricing strategy includes a mark-up capped at 14% and Kirkland, a Costco brand designed to be of equal or better quality than national brands. Product Selection is limited to 4,000 items within a wide variety of categories. Costco does however include ancillary businesses to increase member alternatives. The loss of sales from customers who refuse to purchase large amounts is considered “Intelligent loss of sales.” Treasure-Hunt Merchandising consists of a constantly changing selection of 1,000 luxury items on the floor enticing shoppers to spend more than

Renee McDonald (“Plaintiff”) allegedly sustained personal injuries on October 8, 2015 while shopping at a store owned and operated by Costco (“Defendant”) in Brooklyn Park, Maryland. According to the plaintiff, while walking through the store, she tripped on mop water which caused her to fall to the ground and suffer “severe bodily injuries.” The Plaintiff claims that her fall was caused by the mop water. The mopped area had been secured with a yellow caution sign that warned customers of the wet floor. At the time of the Plaintiff’s fall, however, the sign had fallen down and was lying on the floor. Plaintiff alleges that the store did not have proper signage to warn of the hazardous condition.

It was in the twentieth century that the world was first introduced to a now well-known household name, Costco. In 1976 that the first Costco was opened, formerly known as Price Club, in San Diego. The philosophy of this company is simply stated, “Keep costs down and pass the savings on to our members.” (Costco.com) It has held onto its philosophy of keeping prices low for almost half a century. Costco is self defined as a “membership warehouse club.” (Costco.com) It provides a wide variety of brand name products in their warehouse-style store, and strives to provide all members with the lowest prices that they can offer. Today, Costco is a well known and loved company by consumers.

Costco is among the leading global retailers which provide customers a wide range of merchandise, ranging from small to well-known brands. The company began operations in 1983. Over the years, Costco has been a retailer in low cost membership-only leader, in warehouse club of merchandise. Moreover, Costco does not offer frills warehouse business models as its competitors do.  Costco’s major competitors are BJ’s Wholesale Club and Sam Club (Costco, 2010).

What is Costco’s business model? Is the company’s business model appealing? Why or why not?

Another important aspect is a limited selection of goods. Whereas Walmart or Target may have upwards of 150,000 items sold in their stores. Costco will have less than 4000. They also have their own private label which is only equal to 15% of what they carry in the stores, but it equals out to over 30% of their total sales currently. Another aspect of the product selection is that instead of buying many

Costco is the best cost provider in the wholesale club category and the strategy is associated with Costco’s capabilities and resources, which includes; a streamlined supply chain, good supplier relationships, purchasing power, high sales volumes, quick inventory turnover, and excellent customer service. The three vital components of the company strategy are low pricing, limited product selection and high-end products acquired in closeouts and liquidations. While Costco strives to beat the competitors pricing, it also delivers exceptional value in its high-end offerings and customer service, giving consumers more for their money. Given its customers are the most affluent of all the warehouse clubs, with average incomes around $75,000 and this strategy works well for Costco. However, these customers are conscious not only about money but also value for the product, this fact is supported by the members who choose for executive

Costco Wholesale Corporation is in an industry where there are several of dynamic competition from huge chains such as Wal-Mart or Sam’s Club and Target, and yet it could maintain a competitive and profitable stance. Effective strategic planning is essential part in operating any business in relation toward adapting to organizational and operational adaptation to changing markets. Through inquiries, the influence in the recent economic trends, provide strategies that have use or could use in the adaptation to changes in the market related to issues of economic trends, such as recession and economic downturn. Costco Company’s research paper will further discuss the tactics that has

Costco has many competitors with the primary two being Sam’s Club, a warehouse wholesale business being managed by Walmart, and BJ’s warehouse. Sam’s Club is offering the same services as Costco. They offer their customers lower prices than traditional stores and like Costco they sell their products in bulk to keep members interested. What makes them a threat to Costco is the cost of becoming a member to shop at their stores. For Costco’s basic membership, known as a Business membership, a price