SWOT Analysis
Strengths. The most powerful strength that Costco has is pricing authority. It is Costco’s philosophy that they will provide its members with quality goods at the most competitive prices. Their goal is not to maximize profits in short term, but build trust with customers that they provide the most competitive prices. Costco values their employees more than anything. They pay higher rate of wages that other competitors, and provide good cares. The turnover rate is less than 5% for people who worked for less than a year.
Weaknesses. Costco’s performance is highly concentrated in North American business. Revenues in the U.S. and Canada represented 87.99% of the total for August 31st, 2015. As a result, crisis in North America, especially in the States, could significantly hinder the company’s top and bottom line. Costco has very limited focus in terms of its stores and the regions it covers. Average of customers’ age of Costco is very high.1 As these customers get older, they tend to spend and buy less. In addition to that Costco does little or no advertising. It will be difficult for them to attract younger generation, since families nowadays get smaller in average. Opportunities. Costco needs to attract younger generation customers. Costco has been working hard to keep customer in the age between 19 and 34. First, Costco provided Google Express and InstaCart to make it more convenient to shop. Second, the company has been using promotions, including Living Social. Lastly, it is offering more organic products because customers are health-conscious consumers. These marketing strategies actually brought Costco with new sign-ups from these customers. Costco needs to expand its brand abroad. Since it is very much limited in North American regions, Costco needs to build up reputations outside the U.S. and bring back success. Threats. The discount ware house services industry is highly competitive. The company also competes on a worldwide basis with global, national, and regional wholesalers and retailers, including supermarkets, supercenters, department and specialty stores, gas stations, and internet retailers. Other regular retailers that don’t require membership. Also, there is a big Internet retailer giants. Like Amazon, internet retailer, offers a range of low-cost, good-quality products with shipping options that are hard to beat. PESTLE Political. …show more content…
Costco Wholesale Corporation get huge influence by the political environments of the country where they run the business. Despite the political policies of a country, Costco provides high wage rate to their employees. The result of this contract is the most powerful factor of Costco Wholesale Corporation. Employees work far better than usual, and they feel great loyalty towards the company, which led to the great overall performance of the company. As they run a global business, scenario varies greatly. Costco usually follows US regulations: industrial policy, foreign capital and technological policy, fiscal policy and the export import policy, but they also builds a good relationship with other organizations and countries. Therefore, they can successfully branch out its name to the world. Economical. Economic condition of a country have a great influence of its business strategies especially marketing. So far, Costco’s sales remains consistent with the economy. This is due to the growth of the warehouses and the growth of the membership of the company also runs on the proper track. Social. Cultural diversity plays
Strengths. The most powerful strength that Costco has is pricing authority. It is Costco’s philosophy that they will provide its members with quality goods at the most competitive prices. Their goal is not to maximize profits in short term, but build trust with customers that they provide the most competitive prices. Costco values their employees more than anything. They pay higher rate of wages that other competitors, and provide good cares. The turnover rate is less than 5% for people who worked for less than a year.
Weaknesses. Costco’s performance is highly concentrated in North American business. Revenues in the U.S. and Canada represented 87.99% of the total for August 31st, 2015. As a result, crisis in North America, especially in the States, could significantly hinder the company’s top and bottom line. Costco has very limited focus in terms of its stores and the regions it covers. Average of customers’ age of Costco is very high.1 As these customers get older, they tend to spend and buy less. In addition to that Costco does little or no advertising. It will be difficult for them to attract younger generation, since families nowadays get smaller in average. Opportunities. Costco needs to attract younger generation customers. Costco has been working hard to keep customer in the age between 19 and 34. First, Costco provided Google Express and InstaCart to make it more convenient to shop. Second, the company has been using promotions, including Living Social. Lastly, it is offering more organic products because customers are health-conscious consumers. These marketing strategies actually brought Costco with new sign-ups from these customers. Costco needs to expand its brand abroad. Since it is very much limited in North American regions, Costco needs to build up reputations outside the U.S. and bring back success. Threats. The discount ware house services industry is highly competitive. The company also competes on a worldwide basis with global, national, and regional wholesalers and retailers, including supermarkets, supercenters, department and specialty stores, gas stations, and internet retailers. Other regular retailers that don’t require membership. Also, there is a big Internet retailer giants. Like Amazon, internet retailer, offers a range of low-cost, good-quality products with shipping options that are hard to beat. PESTLE Political. …show more content…
Costco Wholesale Corporation get huge influence by the political environments of the country where they run the business. Despite the political policies of a country, Costco provides high wage rate to their employees. The result of this contract is the most powerful factor of Costco Wholesale Corporation. Employees work far better than usual, and they feel great loyalty towards the company, which led to the great overall performance of the company. As they run a global business, scenario varies greatly. Costco usually follows US regulations: industrial policy, foreign capital and technological policy, fiscal policy and the export import policy, but they also builds a good relationship with other organizations and countries. Therefore, they can successfully branch out its name to the world. Economical. Economic condition of a country have a great influence of its business strategies especially marketing. So far, Costco’s sales remains consistent with the economy. This is due to the growth of the warehouses and the growth of the membership of the company also runs on the proper track. Social. Cultural diversity plays