Costco Wholesale Club Strategic Plan Essay

6612 Words27 Pages
Evan Wabrick
Strategic Plan
Dr. Watts
4/18/2012
Strategic Plan for Costco Wholesale Corporation
Executive Summary
The retail industry is an extremely competitive environment that poses many challenges for Costco Wholesale Corporation and its competitors. Since many of the stores offer the same products, it may sometimes be very hard for customers to differentiate between retail stores. Even though the economy is recovering from a recession, the retail business is still a mature industry and is improving very steadily. Costco and its competitors are affected by the same political, economic, social, and technological factors, such as taxes, presidential elections, SEC regulations, the economic state of the country, exchange rates,
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From a political standpoint, one of the biggest external factors affecting corporations in the retail industry is taxes. The United States corporate federal income tax rate is one of the highest in the world, in which companies have to pay 35% in taxes on income over $18,333,333. (Greenstein, Rogoff, Olsen, & Co., LLP, CPA's) Firms in this industry would like to see corporate taxation decrease so that the company is able to have a higher net income. It is uncertain if the corporate tax rate will increase or decrease; however, presidential candidate Mitt Romney says that he is planning on offering a corporate tax cut to encourage businesses to increase operations in the United States than overseas. The nation will just have to wait and see if this becomes reality. A higher net income could potentially mean more earnings per share and more dividends distributed to shareholders. Not only are retail companies affected by taxes in the United States, they are also affected by export and import taxes on goods produced and sold throughout the world. Costco owns a number of subsidiary companies, such as Price Enterprises, Inc. and Shinsegae Department Store Co, which is located in Korea and subject to foreign taxation rates. Costco, as well as its retail competitors, would like to see a decrease in foreign taxation rates so that they’re able to generate a higher net income from their foreign subsidiaries. Another political factor that affects
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