Problems:
Costco wholesale is the third largest retailer in the United States and the seventh largest retailer in the world. They opened in 1983 and by the end of 1984 they had 9 store fronts in 5 states serving 200,000 members. Currently they have 598 warehouses in 40 states and Puerto Rico, Canadian provinces (82 locations), UK (22), Korea (7), Taiwan (8), Japan (11), Australia (3), 32 warehouses in Mexico. Costco’s fiscal 2011 total revenues were equal to 88.9 Billion with a net income of 1.46 billion. They currently service 25 million households and 6.4 million businesses. Their membership fees total 1.9 billion. Costco’s annual sales per store is 146 million which is 85% higher than the $78 mill that Sam’s club (their chief competitor) makes per store.
Strategic case analysis:
Costco recognizes 5 critical strategies to keep their company continually growing:
• Strategy 1: Pricing- Being able to keep their customers by offering low prices.
• Strategy 2: Product selection-having 3,600 active items as opposed to 125,000-150,000 items that are offered at other large retailers. 85% of Costco’s products are quality brand-name items …show more content…
There is a lot of potential in this particular business, their business is already similar to Costco’s layout. They have a small niche (8%) and are in the same areas that there are already Costco’s. By assimilating BJ’s Wholesale Club Costco would be able to obtain new customers, they would already have the land and building, and they would have reduced competition. BJ’s is not that large of company; with only195 warehouses in 15 eastern states. They could use the existing BJ’s stores to cut down on the costs of building new buildings and creating new customers. Some negatives to buying BJ’s wholesale club would be that it doesn’t have the exact same business model as Costco, the employees would have to be retrained and the initial cost would be very
Costco wholesale is the third largest retailer in the United States and the seventh largest retailer in the world. They opened in 1983 and by the end of 1984 they had 9 store fronts in 5 states serving 200,000 members. Currently they have 598 warehouses in 40 states and Puerto Rico, Canadian provinces (82 locations), UK (22), Korea (7), Taiwan (8), Japan (11), Australia (3), 32 warehouses in Mexico. Costco’s fiscal 2011 total revenues were equal to 88.9 Billion with a net income of 1.46 billion. They currently service 25 million households and 6.4 million businesses. Their membership fees total 1.9 billion. Costco’s annual sales per store is 146 million which is 85% higher than the $78 mill that Sam’s club (their chief competitor) makes per store.
Strategic case analysis:
Costco recognizes 5 critical strategies to keep their company continually growing:
• Strategy 1: Pricing- Being able to keep their customers by offering low prices.
• Strategy 2: Product selection-having 3,600 active items as opposed to 125,000-150,000 items that are offered at other large retailers. 85% of Costco’s products are quality brand-name items …show more content…
There is a lot of potential in this particular business, their business is already similar to Costco’s layout. They have a small niche (8%) and are in the same areas that there are already Costco’s. By assimilating BJ’s Wholesale Club Costco would be able to obtain new customers, they would already have the land and building, and they would have reduced competition. BJ’s is not that large of company; with only195 warehouses in 15 eastern states. They could use the existing BJ’s stores to cut down on the costs of building new buildings and creating new customers. Some negatives to buying BJ’s wholesale club would be that it doesn’t have the exact same business model as Costco, the employees would have to be retrained and the initial cost would be very