James Kidwell Brad Granger Ashley Kerekanich

Company Profile Jim Sinegal, cofounder and CEO of Costco Wholesale Began in Seattle 1983 Mission Statement: To continually provide our members with the quality goods and services at the lowest possible prices

Business Model Generate high sales volume and rapid inventory turnover by offering members low prices on a limited selection of nationally branded and selected private-label products in a wide range of merchandise categories

Target Market Consumers who prefer low prices, limited selection and treasure hunt shopping environment Business Memberships Urbanites Nice neighborhoods not far from Costco Middle Age with above average incomes Large families and consumers who only go large bulk shopping an average of 23 times a year

Competitors Super Savers???????? BJ’s Wholesale Club Wal-Mart Offers wider range of products Focuses on individual consumer Clustering club locations Wal-Mart Sam’s Club

Advertising Limited to direct mail programs promoting selected merchandise to existing members Occasional direct mail to new customers WOM (Word of Mouth) existing consumers and acquaintances Campaigns for new warehouse openings Teams personally contact qualified consumers

Store Layout Treasure hunt Merchandising Warehouse Clothing @ the center Electronics in a corner Bakery and Meat in the back of the store Alcohol in a corner Food & Household/Business Supplies on Outside Furniture in the front and center

SWOT Strengths Opportunities Weaknesses Threats Loyal customer base Products in bulk for cheaper Wide variety of inventory Affluent customers Employee retention Good management Return policy Low shrinkage Strong private label Membership to help small business Growth in more profitable customers Opportunities Membership growth International opportunity E-commerce Advertising opportunities Increase self checkout Weaknesses Lack of advertising No shopping bags No self checkout Less focus on individual customers Limited small quantity products Shorter weekend hours then competitors Hard to find stores in some areas. Threats Similar Competitors (BJ’s Sam’s Club) Cheaper bargain stores (Big Lots, WalMart)

Questions Do any of you have your own Costco membership? Do your parents own Costco Memberships Do you enjoy the free samples Do you agree with Costco’s limited selection?

References Essentials of Strategic Management- A quest for the competitive advantage John E Gamble Arthur A Thompson Jr