How Did Costco Enter China

Costco has a simple strategy for being one of the leaders in the wholesales, which is concentrating on driving sales. If the sales of a company are good than everything else will take care of itself. While other companies such as Wal-Mart, Target and BJ’s pour money into marketing; Costco has a no-frills approach and doesn’t advertise. Costco focuses on selling fewer items which increases sale volume and

The three most critical challenges Starbucks faced in China were political restrictions, socio- cultural, economic and financial challenges. China is highly bureaucratic country with difficult processes of getting permissions and sanctions to start and run business. The biggest challenges for Starbucks were the old tradition of tea drinking in China. At the beginning Starbucks managers didn’t how to accustom Chinese to drinking coffee; to acquaint employees and Chinese executives with coffee drinking experience Starbucks provided different training programs for them in which they learned more about coffee and Starbucks’ culture.

Costco is the greatest wholesale mega store in today’s market opening its first store in 1983 in Seattle, Washington. Its mission statement is "Costco 's mission is to continually provide our members with quality goods and services at the lowest possible prices. In order to achieve our mission we will conduct our business with the following Code of Ethics in mind: Obey the law, Take care of our members, Take care of our employees, and Respect our vendors. If we do these four things throughout our organization, then we will realize our ultimate goal, which is to reward our shareholders."

Costco does not have distributors or retailers to supply its products to the end users. They do, however, have reseller who buy their products for their business and sell to the end user. For example, Costco’s business membership offers tax-exempt purchases to restaurant and small grocery store owners; they then sell those purchased goods to the end user.

Costco is a club card organization. Everyone wants to join. Joining Costco gives people access to great things that they must offer. Costco offers high wages, benefits and opportunities for growth. They offer the best wages around. They reward they employees not only with incentives but with bonuses. Employees can grow with the company because they promote within. Costco has some of the best top suppliers, PepsiCo, and Kraft Heinz. Having some of the best suppliers gives the company to bargain with their prices. A new competitor would find it hard to match Costco products and prices. Five Forces that outline Costco are rivalry among competitors. Rivalry among the company is high. Costco and Walmart are the top two in retail. Their or others, Best Buy and Target which are well known for holding their power. Retailers are competing against each other with whom can give lower prices to customers. The treat of substitute products and service is another force. This force is important because it is a technique to take customers away. They try to take customers away from other retailers by carrying items in one size with the best brands at a low price. Potential new competitors is down because competing with Costco and Walmart is hard. Power of supply. Costco does not spend that much on supplies because they buy in bulk keeping the

In this broadcast I was amazed by how Costco was formed and the little secret things that Costco using to encourage people to buy more. Surprisingly that the employee from Price Club left his job, and open his own company, Costco. I first thought that Amazon would sell more stuff than Costco because their social network system which offers free deliver, good deal, more convenience, and various items are offered. However, Costco alone sells more stuffs than Amazon. I found many interesting about Costco. Costco is a giant store with a tiny selection, for example; there is only three options for plastic zip log. This is a key for Costco that they don’t offer many options due to the fact that they don’t want to spend more money on labor part to

Most wholesalers either cut costs such as employee wages or insurance, or increase prices to increase profit. Costco’s strategy involves treating employees well, cultivating consumer loyalty, and not allowing another corporation to undercut its prices-- ensuring a profitable future.

The business model of Costco’s is simply to generate high sales volumes and rapid inventory turnover by offering its members low prices on a limited selection of nationally branded and selected private-labeled products in a wide range of merchandise categories. The company’s business model is appealing in today’s market because of the economic downturn we are experiencing. Everyday American’s are looking to make their dollar stretch and Costco’s provide them with a great way to buy in bulk and stretch the consumer dollar to the max!

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's mission is to “continually provide our members with quality goods and services at the lowest possible prices (Costco Wholesale Mission Statement - Profits and Prices Revolve Around Ethics, 2013)

Costco has grown from a single location in Seattle, Washington and is now the largest membership based retailer and currently the 6th largest overall retailer in the United States. In 2011, Costco saw a 10% increase in sales and in 2012, Costco is planning on opening 14 new store locations, three of which will be outside of the US. Costco is no longer a small local retailer but now an international company with different threats and opportunities. As the company continues to grow, it is important for Costco to understand the external threats and opportunities that will impact the company in either a positive or negative way. In order understand these forces a SLEPT analysis is used to analyze the social, legal, economical,

Costco is one of the nation’s top three retailers and the world’s largest membership warehouse chain, Costco wholesale Canada operates about 80 membership warehouse clubs across Canada. The company never advertises, charges its 64 million members to shop there and doesn’t mark up any product more than 15 percent, even at this lowest profit margin, 15% for Kirkland private brand, the products were 20% lower than comparable to other brand products. Costco works with this business model and generating $93 billion in annual sales.

The final project is going to be about the market entry of Starbucks into China. This project will focus on gauging the success of the company's market entry strategy thus far. Starbucks has announced in a press release that it believes China will be its #2 market by 2014, and the company has been one of the most successful American companies in that market (Starbucks, 2012). The company entered the Chinese market in 1999 with a store in Beijing. This followed the acquisition of greater knowledge about Chinese business culture through outlets in Taiwan. The company initially used a licensing agreement to enter the Chinese market (Starbucks, 2010).

With China emerging as a global power in business within the last decade, knowing about doing business in China has become more important than ever. There are both many advantanges and challenges with doing business in China in this modern era, and understanding both sides of this coin is the key to being successful in China. Some aspects to keep in mind include the cultural barrier, the price of the work force in China compared to the United States, and have the “made in China” brand be accepted back in the United States.

Political & Legal environment: The political system of a country is an important part of a companies marco-environment. ‘Who governs the country?’ ‘What does the government follow?’ and ‘What legal regulations follow from these policies?’. The most important factors a company is subject to are policy uncertainty, macro instability, and tax rates. Considering China is a country in transition all of the above factors are subject to change, to a degree substantially larger than it is in stable developed countries. We have recently seen changes happening in China on all of the above factors. One example is the new regulations regarding copying, which turned out in favor of Starbucks. However, what will happen in the (near) future is hard to tell. Whatever happens though, Starbucks will be subject to the consequences, whether positive or negative.