Compettive Analysis Costco Wholesale Company

Topics: Costco, Sam's Club, Warehouse club Pages: 6 (1640 words) Published: April 28, 2012
Competitive Analysis
SWOT analysis of Costco Wholesale Co.
Costco Wholesale Corporation is the world’s largest membership warehouse club chain based on sales volume. Sales for the fiscal year ending September 30, 2008 were almost $71 billion ( Costco was founded in Kirkland, Washington by James Sinegal and Jeffrey Brotman. Costco opened its first warehouse in Seattle, Washington, on September 15, 1983. Costco is headquartered in Issaquah, Washington ( Strengths

Costco has a good reputation for competitive pricing on high-end or high-value products. It has undergone expansion and is now represented in many countries around the world. Limited product offerings (usually only 10% of typical retail establishments) create a “treasure hunt” atmosphere for Costco customers. Costco members are very loyal, with renewal rates consistently between 85 and 90 percent. Weaknesses

Its limited range of products in stores may not allow it much flexibility compared to competitors that are less specialized. Costco’s “discount” business plan is typically immune to economic downturn, however, an extended recession or the rising value of the dollar may pinch margins. Opportunities

Expanding product offering in individual stores may provide greater prospects. Costco should also enter new domestic markets and international markets. Costco should also enter unexploited markets such as automobiles, entertainment, or furniture. Threats

Costco Wholesale Co. is under the threat of worldwide competition from other stores, including up-and-coming or unknown retail concepts. Other threats include inflation and the general slow-down of the world economy. Cross-implication matrix for Costco Wholesale Company

| |Strength |Weaknesses | |Opportunities |Enter unexploited markets |More focus on particular products | |Threats |Make use of economies of scale |Maintain high value products |

Brand Competitors: Wal-Mart (Sam's Club), BJ’s Wholesale Club Industry Competitors: Wal-Mart, Kroger, Supervalu
Form competitors: Safeway, Target
Generic competitors: Best Buy, local grocery/market, Chevron SWOT Analysis of Sam’s Club/Wal-Mart Stores, Inc.
Sam’s Club is the membership warehouse outlet of Wal-Mart Stores, Inc. Wal-Mart is the world's largest retailer, with nearly $400 billion in sales in the fiscal year ending Jan. 31, 2007. The company employs more than 2 million associates worldwide through more than 7,400 stores around the world. ( Strengths

Wal-Mart is the most powerful retail brand. It has a reputation for value, convenience and a wide range of products all in one store. Wal-Mart has grown substantially in recent years and has experienced global expansion (for example, its purchase of the United Kingdom based retailer ASDA). The company’s key to success is its use of information technology to support its international logistics system. For example, on-demand reports are available to track the performance of individual products world-wide, store-by-store at a glance. IT also supports Wal-Mart's efficient procurement system. A focused strategy is in place for human resource management and development. People are key to Wal-Mart's business and it invests time and money in training people, and retaining a developing them. Weaknesses

Wal-Mart is the world's largest grocery retailer and control of its empire, despite its IT advantages, could leave it weak in some areas due to the huge span of control. Since Wal-Mart sells products across many sectors (such as clothing, food, or household items), it may not have the flexibility of...

References: Retrieved on October 10, 2008 Retrieved on October 2, 2008
"Wal-Mart Stores, Inc. (Public, NYSE:WMT)." Yahoo Finance. Retrieved on October 2, 2008 Retrieved on October 10, 2008
Desjardins, Doug. "All bulked up: as consumers keep the club craze going, market-share prospects go through the roof". DSN Retailing Today. ( Retrieved on October 10, 2008
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