Costco SWOT Analysis

First, let’s look at “For Customers, A Better Life.” Dollar General doesn’t try to carry everything. They narrow their product selection down to include only the most common necessities.

As previously mentioned, Costco does have some direct competition within the industry from companies such as, another big box retailer Sam’s Club, as well as, Target and Walmart. Comparing for instance, Costco and Sam’s Club, both retailers offer basically low prices, mass quantities, miscellaneous items for the home, and require individuals to pay in order to shop at the establishment (Quirk, 2016). There is a minimal difference in the amount individuals pay to be members of these establishments; Costco’s annual fee is $55 and Sam’s Club is $45 (Quirk, 2016). Although both retailers have various similarities there are a couple of differences that stand out. For instance, Costco extends opportunities for home mortgages, security

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)

In order for Costco to stay competitive in the market and ahead of its competitors, it is essential to venture into different products and services. Costco’s main products vary, which include: groceries and frozen products, fresh meats and produce, bakery goods, beverages and liquors, health and beauty products, seasonal goods, office products, appliances and electronics. To increase Costco’s product differentiation over its competitors and increase sales, Costco began to introduce other products; such as pharmacy, gasoline, auto insurance, and a food court. In addition, extends more services to executive card members that include check printing, payroll services, identity protection, free roadside assistance with Costco’s auto insurance, and traveling benefits.

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

The company has done extensive research into placement of its new locations. Research and history showed that its strong markets can successfully support many additional Costco warehouses and as a result, most new stores were added to existing markets.

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

Costco Wholesale is the nation’s largest Wholesale Club that operates in eight different countries including Australia, Japan, Taiwan, UK, South Korea, Canada, Mexico, and North America. It sells a variety of brand name products as well as their private label brand, Kirkland Signature, at discount prices. These products are sold in bulk packages to small business and individuals who are members. They have three different types of memberships: Gold Star member pays $55, this applies to individuals who do not own a business and the membership comes with two cards, one for each spouse; Business members pays $55, this pertain to small businesses only; and Executive members pay $110, which includes additional products and services to purchase such as insurance, mortgage services, and long-distance phone service. (Hoover’s Company and Industry Reports, 2014). Currently, Costco has 663 warehouse stores all over the world (Figure 1 shows all the key information).

Companies use coupons to get a customer's attention. However, how people use coupons in entirely up to the customer. Without using coupons, you are wasting the money on a daily bases. This money can go to important objects such as gas money or bills. All that will cost the customer to use coupons is time. Being a couponer is essential to saving money. To become a couponer you must start collecting coupons, buy a binder to become organized, and start looking for deals at stores.

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.

Costco is a world-wide membership warehouse store that is devoted to provide the best prices on brand-name goods. One of their missions is to provide their customers with the convenience of exclusive member services to make their shopping experience more enjoyable. Some adjectives that describe Costco is customer oriented, international and diligent.

Costco is among the leading global retailers which provide customers a wide range of merchandise, ranging from small to well-known brands. The company began operations in 1983. Over the years, Costco has been a retailer in low cost membership-only leader, in warehouse club of merchandise. Moreover, Costco does not offer frills warehouse business models as its competitors do.  Costco’s major competitors are BJ’s Wholesale Club and Sam Club (Costco, 2010).

Another important aspect is a limited selection of goods. Whereas Walmart or Target may have upwards of 150,000 items sold in their stores. Costco will have less than 4000. They also have their own private label which is only equal to 15% of what they carry in the stores, but it equals out to over 30% of their total sales currently. Another aspect of the product selection is that instead of buying many

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 Wholesale Corporation (Costco) is a retail membership warehouse chain which was founded by Jim Sinegal and Jeff Brotman in 1983. Headquartered out of Issaquah, Washington, Costco has grown in to one of the largest wholesale giants in the industry. The company’s business model was to generate high sales volumes and rapid inventory turnover by offering members low prices on a limited selection of nationally branded and selected private-label products in a wide range of merchandise categories (Gamble & Thompson Jr., 2009, p. 217). This