Essay about Costco

Costco buys the majority of its merchandise directly from manufacturers for shipment either directly to Costco’s selling warehouses or to a consolidation point where various shipments are combined so as to minimize freight and handling costs. As a result, Costco eliminates many of the costs associated with multiple step distribution channels, which include purchasing from distributors as opposed to manufacturers, use of central receiving, storing and distributing warehouses, and storage of merchandise in locations off the sales floors. (1)

The competition between the wholesale club industry is pretty strong but is mostly dominated by the three main competitors which are: Costco, Sam’s club and BJ’s Wholesale club. These three wholesale clubs for the most part dominate the industry and take away customers from other retail stores because they can offer much lower prices, brand name items and a wide variety of items to purchase from them. When it comes to shares of warehouse sales, Costco had roughly 56 percent of sales, Sam’s club had 36 percent and BJ’s wholesale had a low 8 percent. Unlike most retail stores, these three display all of their items on pallets or their inexpensive shelving which provides them with low cost on décor, labor and advertising.

Pricing, product selection, treasure hunt merchandising, low cost emphasis, and growth are the chief elements of Costco’s strategy. It is a very good strategy because

1. Imagine yourself as the manager of a struggling local suburban regional shopping mall. What do you think the mall should do to improve its performance?

Our recommendation would be to continue their strategic focus on growing their market share, geographical expansion and utilizing marketing integration opportunities via various social media and

Promote From Within: “Promote From Within” strategy is promoted by Jim Sinegal, the founder of Costco. Costco does not hire business school graduates but cultivate employees who

Costco has many risks associated with its financial and operational performance. One of the biggest risks that Costco is facing todays is the competition from other retailers and wholesalers, such as Wal-Mart and Target. Costco compete with its competitors for customers, qualified employees and management personnel, suitable sites and suppliers. The retail business is extremely competitive and continues to get even more completive. Such events as the evolution of retailing in online channels has improved the ability of customers to compare prices and products and as a result enhanced competition. Any significant increases of competition may adversely affect Costco’s financial performance, and make Costco incapable to compete successfully in the future.

In my understanding of the case study one the CEO Jim Sinegal has proven to be an effective CEO. I would give Mr. Sinegal a “B+” in overall strategic Management Process. In developing a strategic vision he has visualized who, what, and how he is going to sell Costco products. The managements vision is to have rapid inventory turn-over, with operating efficiencies by volume purchasing, efficient distribution, reduce handling of merchandise in no-frill, self-service warehouse facilities. This will enable the company to operate at lower price then their rivals and continually offer members lost cost merchandise.

Being one of the biggest club in US, still Sam’s Club is facing competition from another US based club known as Costco. Costco is offering same lowest possible prices and excellent supply chain process. Sam’s Club’s biggest problem is the notable differentiators in low profit margins and offering the best deals on products. The have a

The US warehouse club and superstore industry includes about 20 companies; however the major competitors that Costco faces are Sam 's Club (owned by Wal-Mart), BJ’s Wholesale Club, and Meijer. The club superstore industry is so competitive that these four companies alone hold over 90 percent of sales. These superstores are able to offer competitive pricing because as large companies they can offer a wide selection of products and have purchasing, distribution, marketing, and financing advantages. Due to low margins, the profitability of these individual superstore companies depends on high volume sales and efficient operations. This is where Costco has been able to succeed and set itself aside from the competitors.

Applying the tools presented in this SSP, Costco provides a detailed analysis for transforming business operations relative to industry rivals. This is done in order to create profits and

When you ask an average American about a wholesale dealer, one name stands out, Costco Wholessale Corp. They are one of the biggest wholesale corporation in US. That is very impressive considering they have only been in the industry for about 30 years. They are member based and provide quality goods and services to member only. Their members not just every day people but people who run small business so not only customers buy their product but sell them to others in their own stores as well. While their competitor, Wal-Mart, looks to provide lowest price but inlike Costco’s they overlook the quality. While BJ tries to look pretty to their customer, Costco pay less

There are over 1,178 warehouse club locations across the U.S. and Canada, including Costco’s US warehouses. Unfortunately for the industry, expansion through small-size stores by the industry’s major players is expected to

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

Costco’s overall generic strategy of being a best-cost provider has been effective and sustainable in the retail industry today. Costco’s strategic vision for being a low price, high volume retailer is well known all