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Compare And Contrast Costco Vs Walmart

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Walmart stores is one of the largest retailers not only in the United States but across the world. They hold tremendous power from a retail level and on a political level with governments in the US and outside. Ratios help create Walmart as a company and allows investors to be able to gauge and understand the metrics of the organization. These metrics and ratios help investors understand the specific direction of the company and the effectiveness of executive leadership. The primary ratio that must be understood regarding Walmart's earnings-per-share is the price earnings ratio. This ratio will help the company create the level of stock price regarding its sales and revenues and in considering expenses and liabilities. Since Walmart is on …show more content…

Costco is a much different company regarding its business model which would lend credence to a higher price to cash flow ratio. One of the main differences between Costco and Walmart is that Costco is a membership driven business model while Walmart is open to public. “Analysts at Walmart have noticed that there is a tremendous difference between the way that Costco operates as a business and the way that Walmart operates with their business model” (Gelderman & Hart, 2017). There has been a push from the Walmart perspective to create a level of membership type stores in which only Walmart consumers can shop at while receiving a certain level of …show more content…

Walmart has a 29.03 payout ratio which is much higher than Costco which is at 26.4 and Target which has a payout ratio of 20.0. These ratios help investors and Wall Street analyst understand how companies can successfully manage debt and at the same time become profitable while meeting the needs of the consumers. It is expected and realistic to see that Walmart has a large debt ratio, however, this debt ratio must be understood from an organic and holistic point of view to give credence to the ability of the executive team at the organization. Organizations are entities that are not any different from an analysis point of view than that of actual

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The Home Depot’s last reported earnings were $5.46/share. This number is very attractive to investors as it shows that the company is highly profitable. There price/earning ratio sits somewhere around industry average at 22.10. Investors are confident enough in future growth that they

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It poses no surprise that many retailers sell diamonds. According to Statista, in 1960 the average one carat diamond cost about $2700, fast forward fifty-five years it is now worth ten times that amount. Although all diamonds must meet the same standards and are rated equally there is a justification for spending thousands more to make the purchase at Tiffany’s versus Costco for instance. Costco is well known as a muti-billion-dollar wholesaler selling products in a variety of categories, while staying selective of the products they carry. Costco carries 4,000 difference products while supermarkets have about 30,000.

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Paul G. Moulton - EVP and CIO, Costco Wholesale Corporation The article that I choose to read this week was related to the live of Paul Moulton, and it also refers to the Costco's Marketing Strategy. Moulton serves as CIO at Costco, and He has served as Executive VP and CIO since March 2010 but was Executive VP, Real Estate Development from 2001 to 2010. He earns a salary of about $3 million. According to this article Moulton is in charge for the direction of all technology and info systems of Costco Wholesale worldwide. Also, Moulton has watched the Company raise to more than 700 warehouse places, generally in the United States, Canada, Asia, Australia, Mexico and the United Kingdom.

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Executive Summary Costco is a private company in australia and the customers have to have a membership to shop in any of the store all across the world with over 700 stores About Costco Costco is a whole sale corporate that started in Seattle and come over from America as they have saturated the market over there. They have now got 9 stores in Australia and has 2 upcoming stores to be opened in the soon future. The founders of Costco are James Sinegal and Jeffery H Brotman Costco’ Business Structure Size & Location After opening their first store in 2009 with in 9 years the 8 more stores have opened in NSW, QLD, ACT, SA, VIC in Australia and the sales is over $1 billion per annum.

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Costco is currently in a period of expansion. The company is opening many new stores throughout the world, as well as expanding their online marketplace. Due to this increase in expansion, Costco has also seen an increase in debt as a direct correlation to this expansion. This has caused certain key ratios, such as the debt to equity ratio to increase over the past few years. This could make it appear as if the company is under poor management, or has not been making enough money, and covering its expenses less and less, but this is not the case with Costco.

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Over the last few years, Costco has seen an exponential increase in the number of new memberships. While the Costco gained 2.3 million memberships in the financial year of 2009. Greater than 4 million customers signed up in the financial year of 2011. The Costco’s membership base saw a rise of 3 million in the financial year of 2012 and another 4.2 million in 2013. The strong exponential growth in the memberships continued in 2014 as well.

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Facebook ads, commercials, fast food restaurants and even your everyday grocery stores use psychology. It is used in many different ways starting from the colours of the walls to the environment itself. Costco, Walmart and Safe Way all have different ways of making you purchase more items, sales in specified places and the stocking of shelves. First of all, larger carts were made large for a reason.

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The mission of Costco is “to continually provide all of its members with quality goods and services at the lowest possible prices.” This mission statement is directly correlated to Costco’s business model and its strategy. Costco’s mission statement shows that business really pays attention to quality as a huge selling point. The foundation of Costco’s business model is centered around a membership-only warehouse business model, in which there are high sales volume, rapid inventory turnover due to their fee-paying members. Due to this type of business model, Costco wholesale remains profitable even by having significantly lower gross margins than other wholesalers.

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PRICE CLUB and COSTCO more than the current market for the merger of the two stores. PRICE CLUB for the world's first member of the wholesale and retail stores, was founded in 1976 in San Diego, California, initially to serve small businesses, and later to serve the wider consumer masses, they are open for a group of each purchase , And the first COSTCO stores in 1983, was established in Seattle, Washington, in its business just six years, the annual turnover from 0 to grow to 3 billion US dollars. The two companies merged in 1993 to become PRICECOSTCO and in 1998 they changed their name from Pleasant to Costco Company

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Since the company was founded as a corner store, the company’s business plan has always emphasized on expect more, pay less brand promise that sets it apart from its chief rival, Walmart. Although, Walmart is known for its low prices and offers a large selection to its customers; it’s customer service is often found to be nonexistent. This

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In today economy the #1 way to live is finding the cheapest price on high quality products. As consumers we have to save, save and save even more to live in this world. So finding the best prices that will keep as much more in our pockets is a big deal. What better place to find rock-bottom prices on top-quality items then Costco? This place called Costco is booming in the retail industry with many different unique product category selections found, under one roof.

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Costco sell low prices products at a very high volume. The products are bulk packaged and they sell it businesses and large families. Costco does not have varieties or different brands when the product is the same except when it has a house brand to sell it. These results of sales in a high volume from just one seller allow them to reduce the price, and reduce the costs of marketing. If the directors of Costco think that a product wholesale price is too high, they will refuse to supply the item.

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We believe this is an important ratio to apply because it gives a clear understanding of where their profits are, which affects all business decisions. Higher profit is ultimately better for shareholders and Best Buy’s ratio is comparable to other retail companies, making it a good company to invest in. Additionally, their return on assets (ROA) was 0.0897. While this may seem low, Best Buy is a retail-based company and most retail companies have a low ROA. Best Buy’s ROA is comparable to other retail companies, and better than most, making it a good company to invest

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Key Trends – Globalisation One of the main opportunities Costco has is more global expansion to specific targeted countries. Although operating in many countries, Costco is heavily dependent on the U.S. and Canadian markets. It still has the opportunity to expand into the Asian and Australian markets where it has a limited presence. Costco has the capability to operate about 100 stores in Taiwan, Korea and Japan combined and about 20 stores in Australia. It currently has 41 stores in Taiwan, Korea and Japan combined and 6 stores in Australia.

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What are the two types of core competencies that drive a firm’s competitive advantage? Which firms demonstrate a clear competitive advantage because of (a) major value-creating skills/core capabilities and/or (b) superior assets or resources? Which firms have demonstrated sustainable sources of competitive advantage? The two core competencies that drive a firm’s competitive advantage are cost leadership and differentiation.

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