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The first store was opened in Seattle, Washington in 1983.

History. The first store was opened in Seattle, Washington in 1983. Costco’s mission is to continually provide their members with quality goods & services at the lowest possible prices. In order to achieve their mission they will conduct their business with the following code of ethics in mind:

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The first store was opened in Seattle, Washington in 1983.

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  1. History • The first store was opened in Seattle, Washington in 1983. • Costco’s mission is to continually provide their members with quality goods & services at the lowest possible prices. In order to achieve their mission they will conduct their business with the following code of ethics in mind: • Obey the law • Take care of their members • Take care of their employees • Respect their vendors If they do these four things throughout their organization, then they will realize their ultimate goal, which is to reward their shareholders.

  2. Current Overview • Costco made $106.46 billion in revenue in 2013 • 648 total locations worldwide • 461 of those locations are in the United States • 71.2 million cardholders • 185,207 full and part-time employees • Current stock price is around $118.65 • 70% of Costco’s operating income is generated through membership fees

  3. Retail Strategy • Costco’s small number of SKU’s drive their business strategy • Having a small SKU means you can easily fit the inventory on pallets in the warehouse store while still making it easily accessible to consumers • Costco uses a prepaid membership business model that allows Costco to collect most of its profits 12 months in advance • Offers key products (such as milk) at a slightly lower price than other membership based warehouse stores, such as Sam’s Club, giving it a lead in the market • Frequently changes brands and merchandise giving consumers a “treasure hunt experience”

  4. Strengths • Private label brand (Kirkland Signature) • Happy employees & Skilled managers • Loyal members • Kind return policy • Economies of scale • Additional services (i.e.: pharmacy, photo developing, gas station, tire shop, food court) • Membership rewards • Cost advantage over rivals • Good customer service capabilities • Free samples

  5. Weaknesses • Inconsistent inventory • Little variety in merchandise • Online-store • Store size • Behind on R&D • Supplier dependency • Number of locations

  6. Opportunities • Improved online store and ecommerce • Continued growth and expansion in their private label sector • Continued international expansion • Costco currently has locations in the United States, Canada, Mexico, United Kingdom, Japan, South Korea, Puerto Rico, Taiwan, Australia, and Spain

  7. Threats • Price competition (Sam’s Club and Walmart) • Online retailers with large selection and inventory

  8. References http://phx.corporate-ir.net/phoenix.zhtml?c=83830&p=irol-homeprofile http://www.nasdaq.com/symbol/cost http://www.costco.com/about.html http://www.usatoday.com/story/money/markets/2013/12/02/why-costco-is-beating-wal-mart/3691555/ http://www.bloomberg.com/news/2013-08-30/wal-mart-vs-costco-iii-why-my-critics-are-wrong.html Oregon State University. "Evaluating a Company's Resources, Cost Position, and Competitiveness." Integrative Strategic Experience BA 466. N.p.: McGraw-Hill Education, 2013. 76-77. Print. Shields, Anthony. "Costco Remains the Wholesale King, but Is It an Ideal Investment?"Minyanville. Minyanville, 12 Nov. 2012. Web. 12 Jan. 2014.

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