Costco Corporation Analysis

CASE 1. Costco Wholesale Corporation ANALYSIS

The purpose of this note is to analyze the performance compared to Costco and BJ Club Sat.

Costco Wholesale Corporation is a wholesale club, which requires customers to purchase annual subscriptions for shopping in their stores. The main contenders were Costco Wholesale Sam's Club and BJ. Costco purchased Price Club in 1993, which allowed it to survive in the competitive wholesale industry. It also adopted a strategy that was different compared to its main competitor, Sam's Club This allowed Costco to be the largest wholesale club in the industry in 2001.

I. Costco Performance  I
n Relation BJ

When compared to total revenue of Costco total turnover of BJ in Annex 5 of FIN 197 Seminar in case of Finance of the book, realized that the total income of Costco grew at a increasing pace, with the exception of 2000 and 2001. Costco has a rate of members and higher, total revenues allowed Costco to be higher BJ. Costco also more stores and higher sales per store. Costco has stores in several international locations, while BJ only stores in the United States. However, Costco has lower operating and gross margin shows that BJ was more efficient operations and higher prices for products that Costco. Costco inventory turnover rate is high because it is much larger than BJ. This clearly shows that Costco has an excellent operational efficiency.

II. Costco's performance in relation to the Sam's Club

Club Sam, on the other hand, has more members and warehouses, compared to Costco making it the largest competitor Costco. However, Costco posted higher total income, store sales and operating income due to its strategy. This is also because Costco is internationally dispersed compared to Sam's Club, has more stores in international locations. U
nable to compare the performance of Costco's financial statements with the Sam's Club, as Sam's Club data joins Walmart.

III. Core strength Costco and strategy

Costco continues the strategy to focus on reducing the unit cost of goods and buy stock maintenance units (SKUs) of its suppliers that allow a production economy.

C
ore strength Costco is designed to provide higher total revenues and also to create value for its customers.

Refuse to mark the products of more than 14 percent on the price of the distributor

Costco strategy is really effective to offer a competitive advantage over its competitors and BJ Club Sat.
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