case 1 - Solomon1 Jennifer Solomon Case 1 Costco Wholesale...

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Solomon 1 Jennifer Solomon Case 1- Costco Wholesale I. Company vision/ Mission statement Costco’s mission statement is “To continually provide our members with quality goods and services at the lowest possible prices”. The mission statement is well understood throughout the organization. Costco offers their consumers with low prices on selected private and a limited selection of nationally branded products in a wide range of merchandise categories. Which means both businesses and families can rely on Costco to offer high quality goods and services at everyday low prices. The company has taken many hits for having such “low prices” but in the end it has come out in their favor with high inventory turnover. Although the case did not state a vision for Costco it would be fare to state that after reading this case their vision is to have Costco all over the world and be well respected not only by customers but also, rivals, and employees. II. SWOT Analysis:
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Solomon 2 Strengths Strong brand and scale of operations Efficient store management Low need for advertisement Weaknesses Limited choice for customers Payment options Opportunities Positive outlook for internet sales Increases in home improvement expenditures Expanding electronic equipment Threats Economic conditions High interest rates in the US Strengths
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Solomon 3 Strong brand and scale of operations: Costco is known to be one of the largest chains of stores. They have many warehouses which are located throughout the US, Canada, United Kingdom, Korea, Japan, Taiwan, and Mexico. Having Costco stores located throughout these different countries has allowed them to be capable of leveraging the brand equity. Efficient Store management: Costco’s has such a high inventory turnover than most of the time they are able to sell the inventory before the bill comes, which means they can take advantage of discounts. Low need for advertisement: Costco does not have to spend millions of dollars on advertisement like one of its main competitors Sam’s Club. Much of Costco’s advertisement is word of mouth. Unless they are starting a new store at which point they send out direct mail advertising. Weaknesses Limited choice for customers: Even though Costco is a successful company, one of their problems could set their competitors ahead of them is that they offer fewer amounts of products. Costco stocks 4000 types of household items whereas Wal-Mart stocks over 100,000 types of household items where they do not have to pay a membership fee. This limitation can set Costco back because if customers are dissatisfied with the product Costco has to offer and there isn’t enough alternatives
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Solomon 4 to choose from they will go elsewhere. Payment options: According to this case there were only a few options for payment at Costco. Cash, check, debit cards, Costco card, and American express. We are in a time where most people pay with credit cards because of convenience, or they don’t have the money in
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This note was uploaded on 11/01/2009 for the course ACCT 435 taught by Professor Lowery during the Spring '09 term at Eastern.

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case 1 - Solomon1 Jennifer Solomon Case 1 Costco Wholesale...

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