Costco Research

Topics: Costco, Warehouse club, Sam's Club Pages: 4 (968 words) Published: July 14, 2012
MARKET DEFINITION – This is the Mission and business definition that clearly defines the competitive arena. Market Definition section should include following for Costco: * Market Size (potential market size)

* Product & Services
* Customers
* Broad Price Range
* Competitive landscape

Costco Wholesale Corporation is the seventh largest retailer in the world. As of July 2012[update] it was the fifth largest retailer in the United States, and the largest membership warehouse club chain in the United States. Costco and its subsidiaries (Costco or the Company) are principally engaged in the operation of membership warehouses in the United States, Canada, the United Kingdom, Japan, Australia, through majority-owned subsidiaries in Taiwan and Korea, and a 50% owned joint venture in Mexico (Mexico).

Costco was the first company to grow from zero to $3 billion in sales in less than six years. For the fiscal year of 2011, the company's sales totaled $87 billion, with $1.5 billion net income. Costco is 25th on the 2010 Fortune 500. Costco has 64 million active customers. Core Strategy

Costco’s strategy is to provide customers with a broad range of high quality merchandise at prices consistently lower than they can obtain elsewhere. Costco seek to limit specific items in each product line to fast-selling models, sizes, and colors. Therefore, Costco carry on average of approximately 3,600 active stock keeping units (SKUs) per warehouse in our core warehouse business, as opposed to 45,000 to140,000 SKUs or more at discount retailers, supermarkets, and supercenters.

Costco operate membership warehouses based on the above strategy concept i.e. offering its member’s low prices on a limited selection of nationally branded and private-label products in a wide range of merchandise categories will produce high sales volumes and rapid inventory turnover. This turnover, when combined with the operating efficiencies achieved by volume...
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