Costco Case Study

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Costco Case Study

Christopher Gildea Costco Case Study Seminar: Business Policy and Strategy Professor Gregory P. Grogan

Costco, a discount warehouse based in Issaquah, Washington, specializes in selling quality products at low prices. The company operates as a membership retailer, focusing its business on small and consumers with incomes averaging $75,000 with over 30 percent having incomes of $100,000 or more annually. The wholesale club segment of retailing in 2008 was estimated to be a $120 billion business in the United States, and it was growing about 20 percent faster than retailing as a whole (Thompson,
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Costco has some other operational level problems that in some extent hinder the overall companywide effectiveness and goals achievement. For example, they don’t accept all kinds of credit card from the customers (only American Express); though it is done to minimize the cost of overall operation. Their competitors are capitalizing on use all major card cards. Since November 10, 2006, Sam’s Club began accepting payment via MasterCard credit cards. The results with MasterCard were favorable; company officials reported that in the week following the MasterCard acceptance, the average ticker checkout at Sam’s Club was up 35 percent (Thompson, 2010). To allow their customers the use of different payment options will ultimately bring more sales. Conclusion
It is never acceptable to simply do business the way it has always been done because the market changes, the industry evolves, and numerous other external factors make it absolutely necessary for a business to evolve to retain or gain market share. This is particularly important in the industry Costco is in. The company needs to focus on it customer needs, its future hiring/company growth, and opening up to different payments. With an improved strategy in place, Costco can continue to service its customers, while satisfying the needs of its shareholders.

Ampel, F. J. (2004, Embracing costco-ization -- unlike most big-box

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