Costco Strengths

History Costco used to be a store under the Price Club name and it focused on serving small business at the very beginning. However, the company found Costco can attract a lot of non-business customers. According to Costco’s official website, Costco and Price Club merged in 1993 and combined together. It had 206 stores and earned $16 billion annually. In addition, Costco mentioned that the operating philosophy is lowing down the cost of goods sold and saving their customers’ money. Because of this principle, Costco changed the retail world and their membership help Costco become a successful company.
Internal strengths Costco has strength in lower price and high quality products. For example, the tolite paper which produced by Costco.
According to the video we watched in class, Costco has membership for their customers, and their members can have discount when they buying products from Costco. The video also mentioned that nearly 90 percent of its customers renew their membership each year. So it directly showed that Costco has a large group of loyal customer base. Kimberly Perterson is one of the members of Costco. She claimed that she found that lot of staff she use everyday are from Costco. Further more she is satisfied with these high quality Costco products. Overall, Costco produce high quality products which attract more loyal
That is to say their mainly business are in North America, and they have vast overseas market. So, the opportunities for Costco should be international expansion. For example, China don’t have many wholesale markets, Costco can target the Chinese market. China has huge population and it brings the large demand. In addition, at present, the wholesale market still slowly developing in China. If Costco can enter the Chinese wholesaler market, it will bring huge profits and opportunities.
Threats
The fierce competition is the biggest threat of Costco. As I mentioned before, Sam’s Club and other wholesaler companies are developing quickly. For instance, Sam’s Club has strong background and customer base. They are share the market with Costco. So, if Costco wants to ensure the market share, they should lower their price and produce high-quality products. But, other wholesaler companies also lower their price and invest a lot of money in innovate new and quality products. It is weakening the strength---low price of Costco. Costco should face this threats seriously. Another threat is the development of e-stores. People, especially young generations prefer shopping online. However, Costco don’t do well in online store. Comparing with some well-developed electricity suppliers, Costco doesn’t have a distinct advantage. So, Costco might lose these young customers who prefer online shopping, and this situation really become