Costco

1416 Words Dec 20th, 2012 6 Pages
Appendix Content

Company’s External Environment (External)
(2-line Conclusion: the attractiveness of the industry and key insights from 1-6) 1. Key economic and industry variables: Industry analysis (provide data to support): a. Market Size * $125 billion discount warehouse and wholesale club segment of North America consists of: Costco, Sam 's club, Bj 's. * Warehouse Club Sales In North America: Costco 56% , Sam 's club 36%, Bj 's 8% b. Scope of Rivalry * * supermarkets * department stores * drugstores * office supply stores * consumer electronics stores * automotive stores
Due to the size and capital of these discount
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* * Quantities, prices, selection, and location are common reasons for substitute existence. * Wholesalers have substantially lower operating costs that most retailers cannot reduce prices enough to compete k. The potential entry of new competitors * * Weak * Entry barriers are high. * Capital intensive * Discount oriented experience * Strong networking with suppliers * Customer loyalty l. m. The bargaining power of suppliers * Weak * Cannot dictate prices due to the fixed margins of the wholesalers * A surge in availability of supplies * Low industry members ' switching costs to alternative suppliers * Industry members account for a big fraction of suppliers ' sales n. The bargaining power of buyers * Weak * No Power

5. Strategic Group Map: positioning map of the industry

6. Competitor analyses – discuss key competitors and their key strengths, weaknesses and are they major threats to the firm - briefly explain.

This industry is very attractive if the new entry has the capital to compete with these big warehouses. There is a growth as people are always looking to save and spend less

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