Costco Company Overview
Costco operates on a membership only basis, therefore customers and businesses must purchase a membership to shop at the retailer. Costco currently has two memberships available, which are their individual membership, also known as Gold Star, and their Business membership, both of which cost $55 annually (10-K, 2015). For $110, a customer can upgrade to an executive membership, where they can enjoy a 2% discount (SWOT, 2015). They currently have around 75 million members, and due to their no-frills approach, low prices, and high quality products they have a high member retention rate of 91% in the U.S. and Canada, and an international rate of 87% (Forbes, 2016).
Costco has been steadily growing and their net sales increased from $75,255 million in 2010 to $110,212 million in 2014 (SWOT, 2015). Because they have minimized costs due to their efficient organizational model, they have also been able to lower labor costs. They participate in very little marketing and have cut out many redundancies in their freight shipping process. This has resulted in a hefty increase in their cash from $4,644 million in 2013 to $5,739 million in 2014 (SWOT, 2015). Costco is currently being traded at a high of $149 per share (NASDAQ, 2016). This has allowed Costco to have the freedom to focus on growing and improving.
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Their online sales were $3.5 billion in 2015, which is a 20% increase from 2014, and they are hoping to continue to grow their online presence (Great Speculations, 2015). They have also been working to produce more private label products, such as their brand Kirkland Signature, which are high quality products available at an affordable price. Customer demand for private label brands has increased recently, so Costco plans for private labels to make up 30% of their merchandise in the next few years (Trefis,
Comparison Of Costco And Sam's Club
376 Words | 2 PagesHowever, the Price Club owners left the company a year later, and so PriceCostco had to rebrand themselves to Costco Wholesale
Similarities Between Costco And Sam's Club
672 Words | 3 PagesCostco and Sam's Club Introduction There are so many stores where people can get their groceries and basic needs. Where do you get your groceries from? Out of all the stores Costco and Sam's Club are the mainstream ones with a variety of products. Costco and Sam's Club share many similarities and differences when it comes to their membership, environment/food court, and customer service/experience. Membership Costco and Sam's Club both offer memberships and to shop in the stores or online you must have a membership.
Costco Code Of Ethics Essay
519 Words | 3 PagesThis calculates to total revenue of $88.915 billion. Exhibit 1 also states that the net income for the year was $1.462 billion. By dividing the 2011 net profit by that year’s total revenue we find that Costco’s net profit margin for 2011 was only 1.64%. Note that net income was less than the membership fees. The net profit margin indicates the business itself would make little or no money.
Cost Shop Vs Costco Company
112 Words | 1 PagesPRICE CLUB and COSTCO more than the current market for the merger of the two stores. PRICE CLUB for the world's first member of the wholesale and retail stores, was founded in 1976 in San Diego, California, initially to serve small businesses, and later to serve the wider consumer masses, they are open for a group of each purchase , And the first COSTCO stores in 1983, was established in Seattle, Washington, in its business just six years, the annual turnover from 0 to grow to 3 billion US dollars. The two companies merged in 1993 to become PRICECOSTCO and in 1998 they changed their name from Pleasant to Costco Company
Pros And Cons Of Costco
926 Words | 4 PagesThe introduction of Costco, an extremely large business to a semi rural area will have both pros and cons for not only the area but also Costco itself. These issues include • Political Implications • Environmental Implications • Social implications • Technological Implications • Legal Implications • Economic Implications Political – Political implications on the local community would obviously include legislation and regulation. For example the products they are able to sell and also the local politicians will campaign for or against it. The government controls the sale of certain products; this means that for Costco to want to sell particular products such as alcohol there is legislation that they must abide by. Costco will also have to
Costco: Bring Members With The Best Possible Price
475 Words | 2 PagesCostco is a membership warehouse club. Costco is dedicated to bring members the best quality items in bulk with the best possible price. It started as Price Club in 1976. When it opened up in 1976 the only purpose the business had was serving only small businesses. But later found out that they would be better off selling to non-business members.
Research Paper On Costco Vs Walmart
4668 Words | 19 PagesCostco vs Walmart 19 Costco versus Walmart By James Rock A Research Project Submitted to the Worldwide Campus In Partial Fulfillment of the Requirements Of Course MGMT 524, the Management Science Course For Master in Logistics and Supply Chain Management Degree Embry-Riddle Aeronautical University May 2016 Researcher: James Rock Title: Costco versus Walmart Institution: Embry-Riddle Aeronautical University Degree: Master in Logistics and Supply Chain Management Degree Year: 2016
Who Is What Attracted Us To Costco
748 Words | 3 PagesThey do not have as many stores meaning that the average store approximately receives 100 million dollars a year in sales. Costco focuses on selling in bulks with larger sized quantities and focuses less on everyday goods. Doing this means they are able to increase the volume of particular items and keep prices low. In addition, Costco has perfected a purchasing strategy known as the “treasure hunt” which refers to new incoming items and deals that spontaneously come and
Costco Executive Summary
529 Words | 3 PagesThe warehouses make the company not very liquid, as it is challenging to sell a warehouse. Going back to the highly varied inventory, this is also a factor, some goods may be sold very quickly, while others may remain on shelves for weeks, sometimes months. Costco does try to combat this with more seasonal goods, but this is not the case with goods such as large appliances. They are growing more efficient though, and the company's ROA is growing each year. While Costco does have a good profitability in some ratios and aspects it does not in others.
Costco's Macro Environment Case Study
149 Words | 1 PagesIn Costco’s macro-environment, a variety of factors could affect the company’s economic viability. External factors such as inflation, foreign currency exchange rates, levels of unemployment, reduced consumer confidence, and changes in tax policies could unfavorably affect the demand for Costco’s products and services. Prices of some goods and services including food products, are often variant and subject to fluctuations deriving from changes in domestic and foreign supply and demand, competition, taxes, labor costs, or delays in delivery which could significantly affect Costco’s sales. Therefore, the product’s costs and selling could also increase affecting financial results. Other important economic factors include the increasing international
Cutco Direct Marketing Strategy
554 Words | 3 PagesCutco has targeted the high end of that market and created a corporate culture based on maintaining the highest quality standards. In the marketing strategy employed by Vector marketing, the company that manages the sales force for Cutco, customers have the ability to share their personal stories of family and times when their Cutco product has helped or served them. Thousands of customers have written stories to the company to express how their products have affected their lives, it is these stories that create lifetime customers and appeal to other consumers when looking for what they want. Vector calls this the friends of friends approach to marketing and it is very successful in this case as annual sales are over $200 million. I believe that there is more money to be had if they mass produce and used either retailer or wholesaler channels, but Cutco isn’t willing to sacrifice the quality for the
Costco Target Market Analysis
812 Words | 4 PagesGold Star membership targets the individual or typical household and is offered at $55.00 for an annual membership. Business membership also cost $55.00 for an annual fee and includes household membership and focuses on business owners and managers. This type of membership is used for the purchase of products for business use, personal use, and resale use. The membership owner may add up to an additional six members for an annual of $55.00 each. The Business membership is Costco core target of offering small businesses products with reduced costs intended for resale.
Critical Analysis Of Costco
776 Words | 4 PagesKey Trends – Globalisation One of the main opportunities Costco has is more global expansion to specific targeted countries. Although operating in many countries, Costco is heavily dependent on the U.S. and Canadian markets. It still has the opportunity to expand into the Asian and Australian markets where it has a limited presence. Costco has the capability to operate about 100 stores in Taiwan, Korea and Japan combined and about 20 stores in Australia. It currently has 41 stores in Taiwan, Korea and Japan combined and 6 stores in Australia.
Costco's Competitive Strategies
729 Words | 3 PagesWhat are the two types of core competencies that drive a firm’s competitive advantage? Which firms demonstrate a clear competitive advantage because of (a) major value-creating skills/core capabilities and/or (b) superior assets or resources? Which firms have demonstrated sustainable sources of competitive advantage? The two core competencies that drive a firm’s competitive advantage are cost leadership and differentiation.
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