By October 2015, Costco had established 206 warehouses in eight countries outside the United States. In 2015, the key various markets in which Costco operated in were Canada, Mexico, United Kingdom, South Korea, Taiwan, Japan, Australia, and Spain. As of March 2023, Costco has 849 warehouses worldwide: 584 in the United States, 107 in Canada, 40 in Mexico, 31 in Japan, 29 in the United Kingdom, 18 in Korea, 14 in Australia, 14 in Taiwan, 4 in Spain, 3 in China, 2 in France, 1 in Iceland, 1 in New Zealand, and 1 in Sweden. (Wikipedia, 2023.) We will focus on the mode of entry for the eight countries Costco entered in 2014-2015.
The first place Costco expanded to was Canada. Costco entered Canada in 1985, opening a company-owned warehouse in Burnaby. Costco’s major competitor from the United States, Price Club, also opened a Club in Canada in 1986, just one year after them.
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Their first location was 100% company owned. They managed to do this successfully through extensive local media coverage of the company’s anticipated product offerings, a unique business style, and employee welfare schemes. Costco also gained the attention of suppliers at both local and national levels who were eager to forge business links with the warehouse giant. (Park; Viswanathan; Gopinath; Parveen; Furey, 2019). While it met its domestic product needs in Spain, Costco also planned to use these suppliers to supply products to its other locations worldwide. Costco’s fully company-owned warehouse did much better in Spain than in Australia.
As we can see, Costco found the most success through joint ventures. If Costco is going to expand into new markets and countries, they should do this through strategic alliances such as joint ventures, or acquisitions if there is high competition, like in Canada. When doing business internationally, it is always a good idea to partner with people who know the culture, laws, and