Costco Case Study Costco Case Study In a time of global financial turmoil and shifting demographics, Costco must find ways to attract and retain customers to maintain market share and profitability. In the last 27 years Costco has become the fourth largest retailer in the United States and the eight largest in the world. By the end of 2009 it had 413 stores in the USA, 77 in Canada and 21 in the UK, 9 in Japan and 7 in Korea Australia has one and Taiwan has six (not including joint ventures in
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Costco Case Study The chief elements of Costco’s strategy are low pricing, limited product selection, and a treasure hunt shopping environment. • Pricing: a key element of their pricing strategy is to cap its markup on brand-name merchandise at 14% and markups on their private label items can be no higher than 15%. This strategy keeps customers coming in to shop by enticing them with low prices. • Product Selection: this portion of the strategy only provides members with a selection of about
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inventory turnover. These goods are bulk-packaged and marketed primarily to large families and businesses. Costco does not carry multiple brands or varieties where the item is essentially the same. It provides members with a selection of only about 4000 items, this results in a high volume of sales from a single vendor, allowing further reductions in price, and reducing marketing costs. Costco also saves money by not stocking extra bags or packing materials; to carry out their goods, customers must
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hpu | Case Study: Costco Wholesale vs. Sam's Club vs. BJ's Wholesale | Management 4001 | | Danielle Lewis | 2/3/2012 | | Costco Wholesale vs. Sam's Club vs. BJ's Wholesale The main strategic issue that is faced by Costco (and by Sam's Club to a lesser extent) is the fact that it has trouble competing with BJ's Wholesale on some key factors of customer service. Costco is a warehouse-style retailer, just like the other two companies. Typically, these companies offer lower prices
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COSTCO ASSIGNMENT QUESTIONS 1. What is Costco’s business model? Is the company’s business model appealing? Why or why not? Costco operates on a low-cost business model, which is extremely successful for them. They strive to keep their customers coming back by providing them with the lowest possible prices every time. They also focus on providing their customers with products they will actually want and will buy. This is a very appealing business model because since they run on a membership
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consists of 4000... Costco goes out of its way to surprise and excite its visitors with limited availability designer items. This solves two major challenges faced by warehouse stores – with products sold in such huge quantities, why visit regularly and why buy now. While Costco strives to beat the competition’s pricing, it also delivers exceptional value in its high-end offerings and customer service, giving consumers more for their money. This strategy works well for Costco, given its customers
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, costco Founded in 1983 by Jim Sinegal, Costco is the worlds leading wholesale warehouse retailer. A membership based club, “Costco provides a wide selection of merchandise, plus the convenience of specialty departments and exclusive member services, all designed to make your shopping experience a pleasurable one.” (Costco.com/about). In 2013 Costco reported net sales of $31.77 Billion in the fourth quarter and $102.87 billion during the 52-week fiscal year (Yahoo Finance). Does the company’s strategy
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CASE 17 COSTCO CASE STUDY Case study questions 1. What generic business level strategy (Chapt 5) is Costco pursuing. Explain your choice. Companies that target one or a few segments and try to be the low cost player in that segment are perusing a focus-low cost strategy. Such companies tend to produce a more basic offering that is relatively inexpensive to produce and deliver. This helps to drive down their cost structures. Costco sells a limited range of merchandise in large warehouse type
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focused on the three case studies about Costco, Dove, and L’Oreal which was very interesting. First off in discussing Costco and after reviewing the case study their mission is to always provide great quality goods and services at the lowest prices possible. Costco, over the years has continued to provide quality manufacturers together to give great products to their customers. According to the reading, in comparison to stores such as Wal-Mart that has up to 150,000 SKUs, Costco has 4,000 SKUs that
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Costco was the td largest retailer in the United States and the eighth largest in the world. They have a similar strategy like the other wholesale industry stores of selling top-quality merchandise at lower prices than other stores. To sustain the company’s growth Costco needs to keep adding stores every year. They make more money in memberships per year than they do in net sales. Where they add the new stores is important. Adding more stores internationally could increase market shares and make
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