Costco Wholesale 2008

The strategic objective of Costco is based on the concept of offering members very low prices on a limited selection of nationally branded and selected private label products in a wide range of merchandise categories while producing high sales volumes and rapid inventory turnover. This rapid inventory turnover, when combined with the operating efficiencies achieved by volume purchasing, efficient distribution and reduced handling of merchandise in no-frills, self service warehouse facilities, enables Costco to operate profitably at significantly lower gross margins than traditional wholesalers, discount retailers and supermarkets. (1)

7. Based on the data in case Exhibits 1, 5, and 6, is Costco’s financial performance superior to that at Sam’s Club and BJ’s Wholesale?

case Exhibit 5? How well is the company doing financially? Is there evidence that Blue Nile’s strategy is working—what is the story of the numbers in case Exhibit 4? Use the financial ratios in Table 4.1 of Chapter 4 as a guide in doing the calculations needed to arrive at an analysis-based answer to your assessment of Blue Nile’s recent financial

Their affiliates are offered a controlled assortment of nationwide brand-names in addition to choosing private label goods in a widespread of commodities. Costco merges its fast inventory revenue with the functioning competences to track the business lucratively at a substantial lower gross margin. Moreover, Costco gains benefits of its great sales capacity and fast inventory turnover to gain the advantages of timely sum rebates from merchandise wholesalers due to the extraordinary deals and fast inventory turnover. This allows Costco to produce an abundant of cash in their account. The pricing strategy of Costco is the central factor that reinforce the low price business strategy which is to improve the limitations on brand-named merchandise which is at 14%. Which allows their members to bargain at such a low value. Costco has the prominent status amongst consumers as the number one merchant of mutable merchandise and low prices. Costco's economical benefit is positioned upon its aptitude to purchase in massive wholesale, consolidate, and sell in its

What is Costco’s business model? Is the company’s business model appealing? Why or why not?

2) Evaluate Boston Beer’s performance relative to its peers (Compare BBC's ratios to the ratios of its peers in exhibit 4). (Hint: how do differences in operating strategies translate into differences in financial ratios? Are there

Due to the market; bargains were more important to consumers. Fifty-six of Costco warehouses exceeded $200 million in sales in fiscal 2010, and two of these units each did more than $300 million. This rate of revenue is highly attributable to the strong entrepreneurial culture that encourages its employees and management’s teams to be creative and contribute new ideas to allow the company to constantly evolve and improve. It has been well publicized that Costco rewards and compensates its employees well. It is a well oiled machine that reciprocates its success with its customers and employees.

Costco as a company began operations in 1983 with its headquarters in Issaquah, Washington (Costo 1). It was founded in Washington, United States by James Sinegal and Jeffrey Brotman. Brotman comes from a family that had been involved in retail business before the establishment of Costco. Therefore assuming that his background may have prepared him for running Costco

Costco's mission is to “continually provide our members with quality goods and services at the lowest possible prices (Costco Wholesale Mission Statement - Profits and Prices Revolve Around Ethics, 2013)

2) Evaluate Boston Beer’s performance relative to its peers (Compare BBC's ratios to the ratios of its peers in exhibit 4). (Hint: how do differences in operating strategies translate into differences in financial ratios? Are there

According to Deloitte’s 2014 Global Powers of Retailing Report, it identifies the 250 largest retailers around the world based on publicly available data for fiscal 2012 encompassing companies’ fiscal years ended through to June 2013; however, here mainly focuses on the Top 10 retailers’ analysis.

Costco is the best cost provider in the wholesale club category and the strategy is associated with Costco’s capabilities and resources, which includes; a streamlined supply chain, good supplier relationships, purchasing power, high sales volumes, quick inventory turnover, and excellent customer service. The three vital components of the company strategy are low pricing, limited product selection and high-end products acquired in closeouts and liquidations. While Costco strives to beat the competitors pricing, it also delivers exceptional value in its high-end offerings and customer service, giving consumers more for their money. Given its customers are the most affluent of all the warehouse clubs, with average incomes around $75,000 and this strategy works well for Costco. However, these customers are conscious not only about money but also value for the product, this fact is supported by the members who choose for executive

The overall Business Strategy of Costco encompasses ultra-low prices, limited selection of nationally branded and private label products, treasure hunt shopping environment, low operating costs, strong growth and effective HR management (Thompson, 2011, p. C-57). With high sales volumes and fast inventory turnover, Costco is able to maintain good working capital. This allows Costco to be an overall low-cost provider.

5. Based on the data in case Exhibits 1 and 4, is Costco’s financial performance superior to that at Sam’s Club and BJ’s Wholesale?

“Costco is a wholesale warehouse that sells its merchandise in bulk at low prices to membership paying customers” (Lewis, 2017). “Costco was started by Jeffrey H. Brotman and James D. Sinegal in 1983” (Lewis, 2017). The first Costco went up in Seattle with the name of Price/Costco, but was later changed to Costco Companies Inc., and after a few years the name changed once again to its now current name of Costco Wholesale Corporation. Costco’s merchandise consists of many different name brand products, but they also carry their very own Kirkland brand items. With the Kirkland brand, Costco has made it so they can develop new products and have complete control over quality and price, to help compete with other leading brands. Costco’s target customers tend to be wealthier households with an income of around $100,000, due to the membership fee and on average spending of around $925 per visit (Bowman, 2016). With the revenue Costco brings in monthly they have become the number two retailer store in the world with stores in over nine countries, with $116.2 billion in revenue (Dhiraj, 2017).