Introduction
Costco or Costco Wholesale Corporation (CWC) is an Fortune company based in America. It
operates various membership warehouses in the country with an aim to offer low prices on the
selective and speciality brands in the wide range of products. It is one of the largest of its kind.
Stores Org in 2010 ranked it among the top three largest retailers in the United States and it is
currently the 9th largest retailer in the world (Stores media, 2009). It was also listed as the largest
retailer of wine in the world (WBI, 2007). It has direct network of merchandize through which
the company buys its products directly from the manufacturers and then send them to its
warehouse facilities directly. Its warehouses are of average size over hundred and forty thousand
square feet and works seven days a week on sixty nine hour per week basis. The stocks of the
company are traded in the NASDAQ under the symbol COST.
SWOT Analysis
SWOT Matrix
The SWOT analysis of Costco Warehouse Corporation is as follows:
Strengths
Strong management
Marketing strategies
Diverse offerings
Company policies
Weaknesses
Huge business setup
Meticulous decision making
Weak advertising
Opportunities
Expansion
E-commerce
Governmental stability
Threats
Economic conditions
Not enough diversification
Fierce competition
Strengths
Costco Warehouse Corporation has very strong managerial grounds. The Majority of its
top management officials are “home grown” which means they started and excelled their carriers
through the company Warehouses and learned how to do business at Costco (Costco, 2011). The
employee turnover rate is very low as compared to the other retailers in the industry, for
example, nearly seventy percent of Wal-Mart’s employees leave after completion of their first
year (PBS, 2007). Costco is engaged in low cost promotion and marketing practices. The low
cost strategies usually allows the company to market itself through the most effective word of
mouth techniques which help it save great fortune that it would have spent on its marketing
campaigns. The company offers wide range of national and international brands of products and
goods at low price. The company keeps its policies up to date to facilitate its employees,
management, customers to run an efficient operating structure with high sales volumes
generation at each of its stores.
Weaknesses
Some of the issues Costco currently faces are needed to be resolved for the betterment of
the company. It has a huge network of business across the US and various other regions. These
operations are large scale operations which sometimes hinders the implementations of changes to
grass root levels. It has enormous stores for already aging markets in United States. Secondly
Costco does little or no formal advertising, which means that the company is not getting the
number of customers that it should receive as per its expertise. Costco has very limited focus in
terms of its stores and the regions it covers. Lastly the meticulous decision making impacting its
ability to more quickly react to market conditions
Opportunities
Costco can expand its market presence in the various regions of the world especially the
developing markets of India, China and Japan. These markets show great potential for growth of
the company. It can also start online business opportunities for its customers across the globe.
The company is constantly working to make its distribution channels stronger and enter new
potential markets. The political frameworks in the United States and the other contries lol like
Canada and Japan are good types of government for the business.
Threats
One of the biggest threats in the industry is the fierce competition faced by the existing
market players. The Costo is not only competing in one sector or market but it competes with a
wide range of other types of retailers. Their competitiveness changes because the different types
of products they deal in. Secondly, the economic conditions prevailing in the countries are the
huge setback for the customers to decrease their shopping needs in order to meet their living
protocols. Costco is currently operating in limited number of regions, it will become history in
the presence of other market player’s extensive geographic diversification if it continued the
