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How Does Costco Use To Maintain Its Competitive Strategy

832 Words4 Pages

Costco is one of the largest retailers in the United States and its spread to other parts of the world. From its founding and first store opening in 1963, Costco has expanded internationally becoming the second largest retailer in the United States and Seventh in the world. The company success mainly depends on the Co-founder and CEO Jim Senegal’s business strategies. In many financial comparisons Costco beats its competitors through it is unique business operations, which is to keep the price of the items so low that other stores cannot compete, basically Jim Senegal pays more attention to costumers than competitors. The purpose of this case is to focus describe potential strategies that Costco can use to maintain its competitive strategies. …show more content…

The American Wholesale industry use aggressive marketing campaigns, against rival sellers, in order to attract and retain buyers. It would be hard for new entrants to enter this market as these three Wholesalers have over 37% share, based on the population, of the market and these Wholesalers have been established for almost 30 years. The wholesalers did not have much competition from product substitution as they were able to sell goods for higher quality for prices much less expensive than supermarkets and other department stores. When it comes to bargaining power, Costco is the leader as it was able to offer low prices. Additional details are included in Figure 1, Porter’s Five Force Model: Some opportunities Costco should take advantage of is to enter new markets, the company should focus more on international market and online marketing to attract the younger generation. Additional details are included in Figure 2, Costco SWOT Analysis. Some threats that can limit Costco growth and expansion are the entry of new membership warehouse clubs in oversea markets. Another threat cloud be the aggressive marketing of other retail …show more content…

The company has limited range of products and when it comes marketing and promotion it only sends occasional direct mails to prospective new members and coupons to regular members. . Additional details are included in Figure 2, Costco SWOT

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