Costco Case Study Essay
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Title of Assignment: Costco Case Study
CERTIFICATION OF AUTHORSHIP: I certify that I am the author of this paper and that any assistance I received in its preparation is fully acknowledge and disclosed in the paper. I have also cited any sources from which I used data, ideas of words, whether quoted directly or paraphrased. I also certify that this paper was prepared by me specifically for this course.
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Executive Summary
Jim Sinegal and Jeff Brotman in Seattle Washington founded Costco Wholesale in 1993. Costco merged with Price Club, and doubled their market share in the wholesale industry. They became an immediate leader in the industry.
Costco's sales model is to sell a wide variety of products for low prices at a high volume. These …show more content…
Consumers are not buying large ticket items due to a decrease disposable income. The demand for large volume purchases has decreased with the increase of single-parent families. The high-volume low price model has continued to work, but the economic recession has slowed its growth.
Costco's employees make a higher wage than Sam's employees do. These employees also benefit from a multitude of costly benefits. These expenses have caused the company to accrue less revenue. It will be difficult to maintain their profit margin under the circumstances. Any decline in membership renewals would decrease revenues.
The plan to increase warehouses may infringe on their current stores. The expenses associated with building the warehouse could negatively affect their sales in such tough economic times. Although they are behind Sam's Club in number of facilities, this is not the best time to expand.
Submitted to:
Submitted by:
Date of Submission:
Title of Assignment: Costco Case Study
CERTIFICATION OF AUTHORSHIP: I certify that I am the author of this paper and that any assistance I received in its preparation is fully acknowledge and disclosed in the paper. I have also cited any sources from which I used data, ideas of words, whether quoted directly or paraphrased. I also certify that this paper was prepared by me specifically for this course.
Student Signature:
*******************************************
Instructor’s Grade on Assignment:
Instructor’s Comments:
Executive Summary
Jim Sinegal and Jeff Brotman in Seattle Washington founded Costco Wholesale in 1993. Costco merged with Price Club, and doubled their market share in the wholesale industry. They became an immediate leader in the industry.
Costco's sales model is to sell a wide variety of products for low prices at a high volume. These …show more content…
Consumers are not buying large ticket items due to a decrease disposable income. The demand for large volume purchases has decreased with the increase of single-parent families. The high-volume low price model has continued to work, but the economic recession has slowed its growth.
Costco's employees make a higher wage than Sam's employees do. These employees also benefit from a multitude of costly benefits. These expenses have caused the company to accrue less revenue. It will be difficult to maintain their profit margin under the circumstances. Any decline in membership renewals would decrease revenues.
The plan to increase warehouses may infringe on their current stores. The expenses associated with building the warehouse could negatively affect their sales in such tough economic times. Although they are behind Sam's Club in number of facilities, this is not the best time to expand.