Costco SWOT Analysis

2102 Words Feb 21st, 2015 9 Pages
Selina Palmer
Professor Assuma
MKTG 305
December 8, 2014
Costco SWOT Analysis
Costco is a wholesaler since it buys products from suppliers and resells them to both retailers and consumers. Costco is the second largest retailer in the United States. Its greatest advantage is its wide range of merchandise. Costco has many locations and has retail outlets in other countries. Originally, Costco was merged with Price Club and the original executives belonged to both companies. However, Sol and Robert Price left to start Price enterprises which is no longer in existence today. It was not until 1997 all stores officially changed their name to Costco. Today annual revenue is in excess of 77 billion US dollars.
Costco has a huge target market
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Costco is the leader in coupon savings over Sam’s Club. Members receive coupons in the mail for in store grocery items and on tires. Sam’s Club offers their E-value coupons only for their higher paying members. Costco gives online coupons to entice online shoppers.
Sells movie tickets to AMC, Regal, and Cinemark theatres. They sell ten packets to AMC and tickets in four packs to Cinemark. The savings for the tickets range around three to four dollars. Costco honors the AARP or senior citizen discount card so one can get discounts on drinks and popcorn.
Buying in bulk allows Costco to sell in bulk. Their whole company is geared for this. This way products are available on a large scale and can reach as many consumers and businesses as possible. Costco does not have to rely on their suppliers to meet their demand in the same time frame as other businesses since they can ship products from their warehouse bought in bulk. They cut out the middleman so it is disintermediation. They have a better access to products than retail businesses which have to wait for their supplier to come.
They have wet depots and dry depots meaning their goods are stored both outdoors and indoors. Having one of their main depots in Mira Loma by the Pacific Ocean is a strategic location for Costco for their goods shipped from overseas.
Weaknesses
Brands change based on buying power, whoever supplies the cheapest products will be the manufacturer which gets its products in Costco’s stores. Talking

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