Costco's Strengths And Weaknesses

Costco’s strengths are well documented and very characteristic of their kind of business. They thrive on strong financial performance, exceptional services for members, and a quality mix of products. These three strengths are at the core of Costco’s identity and they cover all of the building blocks of advantage, a major reason in their continued success and growth throughout the years. Their first and possibly most notable strength is that of strong financial performance. In data observed between the fiscal years of 2011 and 2012, Costco’s revenue increased by an outstanding 11.5% from $88,915,000,000 to 99,137,000,000. This increase does not only come from increased sales, but from many different avenues of growth such as, but not limited to: sales from new stores, increases in membership fees, and increases in the sales price of gas. As proof of efficiency, Costco’s operating profit increased 13.1% during the same fiscal year, a 1.7% difference from their total revenue increase shows that the company must have improved operations in order to lower costs. Moreover, Costco reported an increase of 16.9% in net income during 2011-2012 fiscal year, all of this accomplished during a year where the

Towards the end of the 2012 fiscal year, they had a membership count of 26.7 million members at the personal level and 6.4 million business members. Priced at $55 per membership, the membership fees brought in a total revenue of $2,075,000,000 in 2012, an 11.1% increase from 2011, when they brought in $1,867,000,000. The most notable statistic however, outlining the high level of customer responsiveness Costco enjoys, is the renewal rate for existing memberships. In 2012, they had a member renewal rate of 89.7% in North America and 86.4%