Costco Is A Wholesale Discount Store

1411 WordsSep 11, 20166 Pages
Costco is a wholesale discount store that operates in locations throughout the world but mainly in the United States. Members are required to purchase a membership in order to shop at the store. The founders of the business, Jim Sinegal and Jeff Brotman, opened their first location in Seattle, Washington. At the end of 1984 there were nine Costco stores in five states. Throughout the years Costco has continued to grow and as of August 2014 there were 663 locations worldwide with 468 stores in 43 U.S. states and Puerto Rico (Costco, 2016). Costco developed a unique strategy that sets them apart from their competition. The key elements of their strategy is to offer customers ultra-low prices on their products, provide a limited selection of name brand and private label products, create a treasure-hunt shopping environment, strong emphasis on low operating cost, and geographic expansion (Thompson, Peteraf, Gamble, & Strickland, 2014). Costco believed they could keep customers coming back by offering products at extremely low prices. This way they could convince the customers to spend more money because they believed they would save more. They only marked up items minimally to make sure their prices stayed below their competitors. Costco’s strategy was also to only offer a limited number of items at a given time. By reducing the selection of products to choose from, Costco believed this made it easier for the consumer to make a choice. Costco’s internal environment
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