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Costco's Competitive Advantage

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Costco, regardless of external pressures from other wholesalers such as BJ’s Wholesale and Sam’s Club has distinguished itself and experienced tremendous success as a result. In 2010, Costco brought in a net income of 1.3 billion whereas its competitor BJ’s Wholesale drew in only 132 million. The following year, Costco’s net income grew to 1.46 billion while BJ’s’ fell to 95 million. Ever since the mid-2000’s, Costco’s profit has steadily increased while it’s competitors have struggled to simply keep their profits from plummeting. Part of the reason Costco’s profits remain so high is because they outnumber their competitors in terms of store locations. In 2014, BJ’s Wholesale had a total of 200 locations, Sam’s Club had 652, whereas Costco…show more content…
The trial membership would only last for a few months and ideally cost less than 45 dollars order to lure wary customers away from buying a full membership to Sam’s Club or BJs. Having this short-term membership would give Costco a competitive advantage because the other stores do not offer trials, and their membership fees are higher than Costco’s trial membership would cost. The store that customers initially chose is crucial because they will shop there for a whole year and are likely to feel committed to that store and renew their membership at the end of the year. “91% of subscribers renewed their memberships last year”, indicating that most of their current customers are satisfied, which would likely hold true for new customers as well (Kalogeropoulos). Having an affordable trial membership card as an option would enable Costco to attract customers who are on the fence about joining, and set them apart from their competitors. While there are certainly areas that Costco can improve upon, it is still evident that Costco is an extremely effective company. Kirkland, Costco's in-house brand products make up approximately 15% of the store’s merchandise. Customers have come to trust the Kirkland brand, whether it be on socks, plasticware, pizza,…show more content…
· Take care of our employees. · Respect our supplies. Costco promises to conduct its business in total compliance with the law in order to maintain strong moral dignity among its employees. This aids Costco’s in their honest reputation among product distributors, employees and customers. Costco recognizes that its customers are the reason for the company’s success. It acknowledges that there are many alternative-shopping experiences and strives to ensure that their customers receive a 100% satisfaction guarantee, a welcoming shopping experience and top-quality products that are not only low in price but also high in quality and safety. The two biggest competitive advantages that Costco has are its loyal customers and their “absolute pricing authority” that allows them to guarantee low prices. (Delete) Lastly, Costco strives to respect its supplies. Costco wants to create positive and honest buying and disturbing among all who work with Costco. In order to maintain these Code of Ethics, Costco enforces all directors, officers, and employees to comply with the Code of Ethics. Costco takes these ethics seriously and if a violation is reported, the Executive Vice President will personally be responsible for investigating the
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