Swot for Costco
Internal Analysis: SWOT
Strengths:
* Positive Business Strategy – The way Costco operates is providing items in bulk at low prices in membership only warehouses. This has caused an increase in sales with the current recession, which also leads to growth during the slow economic times. * Treasure Hunt Merchandising – Costco changes about a quarter of their items to sell regularly. For example, customers may find Ragu one week, and Prego the next, it just depends on who Costco strikes a better deal with. They also offer deals on name brand products that last only a limited time. * High Membership Renewal Rate – In 2007, it was reported that Costco had an 87% membership renewal rate. The company also boasts that it registered a strong increase in membership numbers, which also includes the amount of Executive membership status upgrades. * Takes Care of Employees and Gain Employee Loyalty – Employees at Costco on average make about $15.97/hr versus $10.30/hr (Wal-Mart employee) in Metro areas.Wal-mart refuses to even release Sams Club average wages. Costco employees also put a higher percentage back into the company, by shopping where they work. They also receive exceptional benefits. * Low Markup – There is nothing sold at Costco that is marked up more than 14% of what Costco paid. In fact, the average markup is actually 10% versus 20%, which is Wal-mart’s average markup, and versus 50%, which is the average department store markup. * Good return Policy/Customer Service – Costco will accept the return of almost any items it sells without a receipt or obligated store credit. This keeps customers from dealing with the usual hassle of a return. * Strong Management – Most of Costco’s management staff and vice presidents started out in the company with entry level jobs. This way they are familiar with business operations already and can better manage a staff and the business and also boosts moral to current employees knowing there are
Strengths:
* Positive Business Strategy – The way Costco operates is providing items in bulk at low prices in membership only warehouses. This has caused an increase in sales with the current recession, which also leads to growth during the slow economic times. * Treasure Hunt Merchandising – Costco changes about a quarter of their items to sell regularly. For example, customers may find Ragu one week, and Prego the next, it just depends on who Costco strikes a better deal with. They also offer deals on name brand products that last only a limited time. * High Membership Renewal Rate – In 2007, it was reported that Costco had an 87% membership renewal rate. The company also boasts that it registered a strong increase in membership numbers, which also includes the amount of Executive membership status upgrades. * Takes Care of Employees and Gain Employee Loyalty – Employees at Costco on average make about $15.97/hr versus $10.30/hr (Wal-Mart employee) in Metro areas.Wal-mart refuses to even release Sams Club average wages. Costco employees also put a higher percentage back into the company, by shopping where they work. They also receive exceptional benefits. * Low Markup – There is nothing sold at Costco that is marked up more than 14% of what Costco paid. In fact, the average markup is actually 10% versus 20%, which is Wal-mart’s average markup, and versus 50%, which is the average department store markup. * Good return Policy/Customer Service – Costco will accept the return of almost any items it sells without a receipt or obligated store credit. This keeps customers from dealing with the usual hassle of a return. * Strong Management – Most of Costco’s management staff and vice presidents started out in the company with entry level jobs. This way they are familiar with business operations already and can better manage a staff and the business and also boosts moral to current employees knowing there are