Compettive Analysis Costco Wholesale Company
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 (www.online.wsj.com). 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 (www.hoovers.com). 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
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 (www.online.wsj.com). 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 (www.hoovers.com). 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
References: http://online.wsj.com/article/PR-CO-20081008-900744.html?mod=wsjcrmain Retrieved on October 10, 2008 http://hoovers.com/costco-wholesale/--ID__17060--/free-co-profile.xhtml Retrieved on October 2, 2008 "Wal-Mart Stores, Inc. (Public, NYSE:WMT)." Yahoo Finance. Retrieved on October 2, 2008 http://www.hoovers.com/kroger/--ID__10864--/free-co-factsheet.xhtml 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. (http://findarticles.com/p/articles/mi_m0FNP/is_23_44/ai_n15970570) Retrieved on October 10, 2008