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Costco Presentation1 .pptx - Case Study: Costco - The...

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Case Study:Costco - TheWarehouse WarsName – Devam Jayesh Kumar ShethStudent ID - 158507210
Situational AnalysisCostco Wholesale is a large multinational that operates big-box retail stores. The company was formed in 1993 through the merger of the Price Club and Costco Wholesale. Ithas experienced a lot of success luring customers to its membership plans which make up most of its revenues. This means that only its members can visit these stores.The company has managed to exploit opportunities that exist in the marketplace while using its membership business model. This model means that the company’s mainobjective is to serve its subscribers. it does so by building stores that are specifically intended to serve the unique needs of its clients. Most of the products on sale are in bulk,therefore are priced low.Costco Wholesale is a major success because it recognizes that all households are in need of many products sourced from retail stores. It aims to convince such customersthat it is in their best interest to become members of a club that offers them such products at the best market prices. The fees for membership at Costco Wholesale is $45 forbusinesses, and $50 for individuals. This fees guarantees all members access to stores with the best market prices. For most consumers in the market, this is a great dealbecause the fee is much lower that the total, they would have to pay at other stores during the period of one year.The overall success of the company can be attributed by its competencies in key areas. For example, it has managed to offer some of the best products for hugely discountedprices. This is significant because it means that many consumers will be attracted to its stores.The company has also managed to keep its running costs to a minimum. Large retail chains regularly focus on provided the widest array of product choices to attractcustomers. The company’s business model is unique. It is designed to make profit from subscriptions while operating a retail store. Retail stores make profit by having marginson their products.
Situation analysis cont’Costco has managed to find a way to remain competitive by cutting prices where necessary. The main products offered at their stores are mainly basicitems that most people need. This means that they do not stock a wide variety of products at their stores because it would significantly increaseoperational costs. Rather, the retailer focuses on offering existing deals in the marketplace that includes seasonal products. This way, the stores canminimize overall running costs which keeps prices for products low.

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Term
Summer
Professor
Ms. Wong

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