Costco Case Study

1284 Words 6 Pages
Register to read the introduction… Both BJ’s and Sam’s Clubs represent Costco’s key competition in an ever growing industry. Thus, they all contain strengths within their business plans to maintain their market share. Some of BJ’s strengths are that they are the only warehouse operator to accept Mastercard, Discover, Visa, American Express, and Revolution Card chain wide. Furthermore, over 97 percent of clubs have self checkout, which is more than most warehouse operators. Thirdly, they maintain longer warehouse hours than all competitors. Lastly, they are the only warehouse to accept manufacturer’s coupons. On the other hand, BJ’s do not have international facilities and only expand in previously penetrated markets with the least number of stores- 187. This provides a huge weakness against competitors for obvious business reasons. They also are the only warehouse to have a gross profit margin drop going into the recession in 2008, dropping 10.54% to 10.25% while the competition’s gross profit margin still increased. With that they also do not have union workers so any attempts to unionize could disrupt business. In addition, they have the lowest EPS compared to their competition, which helps Costco maintain their market share. Even though this is what is holding them back BJ’s still has many business opportunities. For instance, they can have a new “point of sales” system that could prove to be successful, …show more content…
This company has a greatest competitive edge and provides at least some sort of threat to Costco. Their strength includes having increased dividends every year since their first dividend in 1974, has the highest gross profit margin compared to its competitors, and is the largest retailer, including Wal-Mart, in the world so they have the most resources financially and a great deal of influence. Not to mention that they have the highest number of stores compared to its competition with 596 stores. In addition, they have the highest EPS, which provides them with an incredible repertoire. However, with strengths come weaknesses, and Sam’s Club doesn’t defy this rule. They currently overlap with Wal-Mart supercenters because it is difficult for investors to distinguish Sam’s Club actual numbers. Also, their comparable store sales are down 1-4% in 2012 while Costco has increased. Though compared to BJ’s and Costco they were the only warehouses in the past few years to have a decrease in revenue. On the contrary, they have a few opportunities that they can use to better their market strategy. Firstly, they want to open 5-10 stores in 2012 that can widen their consumer base. Secondly, they are planning to slow new store growth causing the impact of new stores on comparable sales to stabilize over time. Thirdly, increasing grocery and wellness sectors to keep up with the health trend is a major opportunity they can capitalize on. All the

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