Costco Analysus
Case Study
Competition among the North American Warehouse Clubs:
Costco Wholesale versus Sam 's Club versus BJ 's Wholesale
Trevor McAlmont
Chaoying Shen
Keyue Zhang
Wenjun Zhou
The overall Business Strategy of Costco encompasses ultra-low prices, limited selection of nationally branded and private label products, treasure hunt shopping environment, low operating costs, strong growth and effective HR management (Thompson, 2011, p. C-57). With high sales volumes and fast inventory turnover, Costco is able to maintain good working capital. This allows Costco to be an overall low-cost provider.
PEST Analysis of Warehouse Club Industry
Political:
• Trade regulations • Health and safety •
Economic: • Recessions • Disposable income • Exchange rates •
Social:
• Women in worforce • Environment issues • Dual family incomes
Technology: • Inventory management • Point of sale technology • Logistics system • CSR customer relationships management
Global: • International trades nowadays. • trade in global market to reduce their cost of material • import restricts from different countries.
Demographic:
The lower and middle class customer should be the main customer group
Resource and Capabilities
Recourses:
Tangible resources: 567 warehouses ,including 414 in the United States and Puerto Rico, 77 in Canada, 32 in Mexico, 21 in the UK, 9in Japan 6 in Taiwan and 1in Australia. Merchandise inventories $5405M Cash and cash equivalents $3157M. Intangible resources: brand image, buyer loyalty, goodwill reputation and the strong human assets and intellectual capital of managers. The compensation system and the motivation level of company personnel
Capabilities:
Costco has great capabilities in reducing cost and expanding business. Also, they are strong in understanding their customer base with managers who had a
Competition among the North American Warehouse Clubs:
Costco Wholesale versus Sam 's Club versus BJ 's Wholesale
Trevor McAlmont
Chaoying Shen
Keyue Zhang
Wenjun Zhou
The overall Business Strategy of Costco encompasses ultra-low prices, limited selection of nationally branded and private label products, treasure hunt shopping environment, low operating costs, strong growth and effective HR management (Thompson, 2011, p. C-57). With high sales volumes and fast inventory turnover, Costco is able to maintain good working capital. This allows Costco to be an overall low-cost provider.
PEST Analysis of Warehouse Club Industry
Political:
• Trade regulations • Health and safety •
Economic: • Recessions • Disposable income • Exchange rates •
Social:
• Women in worforce • Environment issues • Dual family incomes
Technology: • Inventory management • Point of sale technology • Logistics system • CSR customer relationships management
Global: • International trades nowadays. • trade in global market to reduce their cost of material • import restricts from different countries.
Demographic:
The lower and middle class customer should be the main customer group
Resource and Capabilities
Recourses:
Tangible resources: 567 warehouses ,including 414 in the United States and Puerto Rico, 77 in Canada, 32 in Mexico, 21 in the UK, 9in Japan 6 in Taiwan and 1in Australia. Merchandise inventories $5405M Cash and cash equivalents $3157M. Intangible resources: brand image, buyer loyalty, goodwill reputation and the strong human assets and intellectual capital of managers. The compensation system and the motivation level of company personnel
Capabilities:
Costco has great capabilities in reducing cost and expanding business. Also, they are strong in understanding their customer base with managers who had a