Costco SWOT Analysis

Topics: Costco, Retailing, Online shopping Pages: 6 (2118 words) Published: March 8, 2015
Selina Palmer
Professor Assuma
MKTG 305
December 8, 2014
Costco SWOT Analysis
Costco is a wholesaler since it buys products from suppliers and resells them to both retailers and consumers. Costco is the second largest retailer in the United States. Its greatest advantage is its wide range of merchandise. Costco has many locations and has retail outlets in other countries. Originally, Costco was merged with Price Club and the original executives belonged to both companies. However, Sol and Robert Price left to start Price enterprises which is no longer in existence today. It was not until 1997 all stores officially changed their name to Costco. Today annual revenue is in excess of 77 billion US dollars. Costco has a huge target market which includes the family since families like to buy in bulk to keep things on hand. However, Costco has merchandise for kids and a lot of single people go to Costco as well so it can appeal to pretty much everyone. Businesses are another target market since a lot of smaller businesses can buy the goods they need for an affordable price and get it in bulk. Bakeries for instance buy drinks, pastries, and breads which can be sold at a higher price. Costco’s main competitor is Sam’s Club. Sam’s Club is owned by Wal-Mart which helps Costco because small businesses do not support Sam’s Club as much as Costco. A lot has to do with image. Costco buys brands and renames them under the Kirkland name. Sam’s Club struggles to be able to rebrand certain products. For instance, in 2002 Costco bought Bumble Bee tuna and renamed it under the Kirkland brand and it sold pretty well. Strengths

One of the largest retailers. Costco is one of the top wholesale clubs in the United States. It is present in thirty-eight countries and operates through 664 warehouses. Offer free samples. This entices the person to buy the product. Good quality meat department. I hear a lot of compliments about the meat section at Costco. Their whine selection has a nice variety as well. Great customer service

Rapid turnover of inventory
Has a wide arrange of merchandise categories such as electronics, liquor, clothing, food, decorations, and furniture plus much more. Sell automotive products including gasoline
Also operates consumer and business services
Online shopping- online stores are available for consumers in the UK and Mexico as well as the United States and Canada. Costco opened up a business to business online shopping site in 2001. Started offering online photo printing for its members in 2005. Costco members can receive vacation packages for hotel lodging, cruises, and theme parks. Executive members have even greater benefits with Costco travel. There are also discounts on auto insurance and home insurance. Overall, their membership package is better compared with Sam’s Club. For a forty dollar membership with Sam’s Club one will get free flat tire repair, battery testing, wiper blade installation, and a program in which you can buy online and pick up the product at the store the next day. The advantage plus membership at Sam’s Club for one hundred dollars will get one those perks plus early bird shopping at 7 a.m. with a discount on pharmacy medications and extra year warranty on select items. Get food while shopping- Costco offers a menu including hot dogs, pizza, a chicken bake, sodas, smoothies and frozen yogurt. Costco knows its customers get hungry while walking their huge store and most people have most likely skipped breakfast or have not eaten lunch. The variety of choices is appealing with pizza offered as cheese, pepperoni, veggie, or a combo. The yogurt is vanilla, chocolate, or swirled. I think yogurt was a great choice since customers are moving towards healthier choices. My opinion is people feel better about eating a hot dog since he or she chose a healthy option by eating yogurt rather than ice cream and a hot dog both. Consumers trust the Kirkland brand and believe in Costco having better...
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