Costco Case

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Costco Case Analysis Company introduction Costco Wholesale Corporation is one of the largest membership wholesale companies in United States and the world. Costco has come long way since its establishment in 1983 by Jim Sinegal and Jeff Brotman. Costco provides goods and services only to their members. It is common to see many of their customers are not the consumers of the product. This is in a sense that many of their customers buy products in bulk and sell it to other consumers. Business Model Costco Wholesale Corporation’s business model according to the case is “To generate high sales volumes and rapid inventory turnover by offering members very low prices on a limited selection of nationally branded and select private-label…show more content…
This was done mostly through direct mail by sending saving coupons to the members. Growth Strategy Costco has three elements to its growth strategy which are “open more new warehouses, build an ever larger and fiercely loyal membership base, and employ well-executed merchandising technique to induce members to shop at Costco” (Thompson, 200). All of these strategies have been well achieved through implementation of various programs such as lower price, treasurer-hunt, and saving coupons. Costco has been able to grow very faster than its competitors in the market. During 2005 to 2008 Costco opened 127 new stores. As of October 2008, Costco had 102 wholly owned warehouses outside United States, not including 50-50 venture for the operation of 31 Costco warehouses in Mexico. Looking at the numbers of stores and growth of Costco, it is evident that it has left its competitors way behind. Website Sales Costco operates two websites, in the United States and in Canada. These websites were targeted to provide alternative shopping experience to its customers by providing services like travel services, digital photo processing, prescription drugs and pharmacy products, along with other membership services. Overall Strategy Evaluation Costco’s has

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