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Costco Warehouse Case

654 Words3 Pages

Costco is a membership warehouse club, dedicated to bringing our members the best possible prices on quality brand-name merchandise. With hundreds of locations worldwide, Costco provides a wide selection of merchandise, plus the convenience of specialty departments and exclusive member services, all designed to make your shopping experience a pleasurable one (About). Costco Wholesale is a multi-billion dollar global retailer with warehouse club. Despite the large size and explosive international expansion, Costco continue to provide a family atmosphere in which employees thrive and succeed.
The company's first location, opened in 1976 under the Price Club name, was in a converted airplane hangar on Morena Boulevard in San Diego. Originally serving only small businesses, the company found it could achieve far greater buying clout by also serving a selected audience of non-business members. With that change, the growth of the warehouse club industry was off and running and productivity was off the roof. Productivity is an economic measure of efficiency that summarizes and reflects the value of the outputs created by an individual, organization, industry, or economic system relative to the value of the inputs used to create them (DeNisi, 13). In 1983, the first Costco warehouse …show more content…

Second is Costco attracts a more affluent customers than Sam’s Club, making it less vulnerable to pull back by consumers when the economy slows (Costco). Costco weakness is high geographic concentration of stores (30% of sales comes from in California)(Costco). Costco opportunities are E-commerce only generates 3% of its total sales so a big push here could win some business away from the likes of amazon and Sam’s Club. The threats are Sam’s Club has been aggressively expanding its service to business members and has planned to improve its private label brands

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The prices must stay competitive, so they have an internal Costco research team. The price and the quality must always be reviewed on a continuous basis. As crazy as it is Sam’s club is owned by what Wal-Mart. Sam’s Club and Costco are almost the same if you consider the products and services that they both deliver. When it comes to the research that needed for the product expectations and supplier preference.

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Costco and Sam's Club Introduction There are so many stores where people can get their groceries and basic needs. Where do you get your groceries from? Out of all the stores Costco and Sam's Club are the mainstream ones with a variety of products. Costco and Sam's Club share many similarities and differences when it comes to their membership, environment/food court, and customer service/experience. Membership Costco and Sam's Club both offer memberships and to shop in the stores or online you must have a membership.

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Strengths: the main strengths of Sam’s Club as they are consumer oriented, their consumers are able to buy in bulk, their supercenters consist of a one stop shopping experience, a satisfaction guaranteed policy, always promoting consumer goodwill, the ability to buy from local merchants, profit-sharing and stock ownership for employees, tops many in their industry in cutting-edge technology, has an ongoing development of its employees and a strong community association. Weaknesses: Their weaknesses are they have no official mission statement, their memberships are only for SAM’S Club, they retain poor performing employees, outdated store policies, and only a small number of minorities and women are in the top management position. Opportunities: Sam’s Club has a lot of opportunities, such as implementing the ease of shopping, engaging the growth of internet shopping, increasing dollar value, parallel shopping configurations globally, expected increase in their retail sales, having environment conscious customers, the growth of the elderly population, and a virtually untapped Asian/European market by

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Exclusivity to members: As we all know, Costco are the membership system. This system allows exclusivity to members, and exclude other shoppers. It restricts the shoppers shop easily. Even there are more than 81.3 million cardholders, not everyone has the cards. For example, there are many tour groups come to California, especially Chinese tour groups.

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Costco Wholesale Corporation strives to grow and expand through their competitive retail and pricing strategies in their market. As a retail firm, Costco depends on cusumer purchasing capacities (Gregory 2015). Costco offers a limited number of items that are afforadable quality services and goods to their consumers and believes it aids to their continued growing and expanding success. Costco is driven by cost leadership for their retailer store because they would rather maintain the lowest prices possible which enable customers to return. Costco largely relies on their pricing and retail strategy to continue sales and organization success.

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In 1983, the first Costco was open. They first opened in Seattle. Costco was the first business ever to grow from zero to $3 billion in sales in less than six years. In 1993 Costco and Price Club merged to operate as PriceCostco and had 206 location generating $16 billion in annual sales. Seven years later Jim Sinegal channeled his expertise into co-founding Costco Wholesales with Jeff Brotman, as stated on Costco.com.

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Costco's History and Success Costco's history dates back to 1976, when Sol Price established the first Price Club in San Diego, California. Price Clubs were wholesalers that charged members a yearly fee. Jim Sinegal and Jeff Brotman founded Costco in 1983, and the foremost storehouse opened in Seattle that year. Costco and Price Club combined in 1993, resulting in the contemporary Costco company. Costco is an American international organization that operates as a "membership warehouse club".

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As of 2023, Costco has 850 total warehouses with 158 of them being outside of the United States and Canada (Costco, 2023). Costco is able to scale partially because of their hiring and product selection, but also because they slowly build up their store counts in the same countries over the years by capitalizing and adjusting to each countries cultures and catering to it. For instance, Costco entered Japan in the 1990’s and they currently have 31 stores their which is the most outside of North America (Costco, 2023). This is due to their growth strategy (Parnell, 2014).

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Costco’s supply chain revolves around a Build-to-Stock type to satisfy customer needs. Build-to Stock refers to when a company orders the inventory ahead of time based on previous sales, or the historical demand. This type of supply chain is beneficial to companies like Costco since they do not have any offices where they can store any items. Due to this reason Costco orders their supplies ahead of times and just stock the products on top of each other in higher shelfs. None of the items that Costco produces are customized or custom made.

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Overall, majority of the members consider the price at warehouse clubs and the exceptional deals played foremost factors of keeping their willingness to shop there. Many customers mentioned they are loyal to the warehouse membership club because of their reputation for great quality merchandises and they enjoy the simple layout shopping environment in stores; hence, members gradually increase their trust in those organisations and satisfy with the good shopping experience, and spontaneously establish loyalty with warehouse clubs. Furthermore, most of the customers that have been interviewed think they not only enjoy the external shopping experience of warehouse membership club, at the same time they receive emotional connection with the employees; which always provide positive shopping experiences by interacting with them and make their experience go beyond to meet their satisfactions. In addition, most of the interviewees have a big family mostly beyond five people, or some of them go there to buy stuffs for a party or gathering; it is incredible that most of the customers shop a whole shopping car of items and they all satisfied with the sell in bulk

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Introduction Costco Wholesale Corporation is a multi-national membership warehouse club, that specializes in providing items to its members at favorable prices. The company has a vision of making its shopping experience unique and highly regarded. Boasting a variety of stock, Costco prides itself on accessibility to particular departments and the provision of benefits to its members. The company’s operating philosophy has been simple – keep costs down and pass the savings on to its members. Costco’s large membership base and tremendous buying power, combined with a never-ending quest for efficiency, result in the best possible prices for its members.

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Currently, members only warehouse clubs offer only tire changes for their auto service as well as a partial line of clothing. With no changing rooms to try on the clothes they sell, many times items are returned to the store due to sizing issues. In addition, these warehouses are not appealing to the eyes and do not always have staff readily available to answer consumer questions. Lines during the weekend can be atrocious with minimal registers open.

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Furthermore, research has shown that there is a high percentage of overlap between Amazon Prime and Costco membership holders. Should Amazon take over the grocery marketplace, Costco could see a serious decline in

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Introduction Re-invention and targeted approach towards achieving competitive advantage were the key strategic actions taken to make Trader Joe’s (TJ) from a glorified regional convenience store to a nationwide specialty retailer, and that might just be the most important thing in the supermarket business. The footprint of this success lies in the efficient utilization of the company’s resources and their unique capacity to deploy its resource and capabilities(BB835). The result of such unique circumstances helped TJ to stay far ahead of its competitors in terms of customer satisfaction and brand loyalty. This TMA proposes that, through a company’s resources and capabilities TJ managed to imitate Key Success Factors (KSF) that created value,

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