Costco Analysis

EXECUTIVE SUMMARY

Costco Wholesale Corporation is recognized as one of the largest wholesale club warehouse in the United States. In less than six years, Costco Wholesale Corporation was the initial company who manufacture from zero to $3 billion sales. They manage an international membership warehouses that bring superiority, trademark products at significantly low prices than at other conservative wholesale or retail foundation. Their business strategy depends on high sales volume with rapid inventory turnover, which made it possible by providing low prices and limited product selection along with broad variety of branded and private label products, which will help the retailer preserve positive escalation during slow economy. They focus on selling exclusive goods and trademarks at lower prices, and frequently at very high volume. Costco distinguish them by providing limited precise items in each product line, while their competitors like BJ’s and Wal-Mart offer many commodities.

Their strategy is a combination of low-cost provider and differentiation. Costco’s motivation behind the broad differentiation is because they don’t provide wide range of products but instead they offer the most popular products in the market. There are other retailers who stock over 40,000 different product, but Costco will provide members only with 4,000 products for customers to choose from. Their strategy is united with unique resources and abilities because they have purchasing power, high-sales volume, fast inventory turnover and excellent customer service. Their mission is to provide their customers with quality goods and services at lowest possible prices every day. They classify their business in provisions of benefiting their customers.

Generally Costco’s plan has been very efficient, and should continue this approach for the future. The purpose that Costco is so profitable is because of their positive behavior that they have towards their employees, which affects their customers in an optimistic way. This makes consumers want to return and also allows them to spread the expression for new consumers who are entering the market. Costco will maintain to grow up only if they follow their commendable thoughts and visible concepts. Retail industry has tremendously competitive surroundings, which postures numerous challenges for Costco and its competitors. Ever since mostly all the stores offer the same goods, which occasionally become very hard for consumers to distinguish between the retail stores.

Costco has been affected by the macro environmental variables such as taxes, exchange rates etc. These external factors have an enormous power on how Costco perform their business. Costco is one of the foremost organizers in the retail industry because of their strategic low-cost operating system, pricing approach, and financial steadiness. But still they are susceptible to various threats,