Swot Analysis For Costco

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Recommended: The main elements of Costco’s strategy

SWOT Analysis
Costco Wholesale
Strengths
• High Quality in low prices
• Employee relationship Weakness
• Offer Limited products
• Low Profit margin and high wages
Opportunities
• Expansion into other States
• Growing trend of online retail shopping Threats
• Sam’s Club
• Increased health care cost

Strengths
The biggest strength for Costco is the high quality products in competitive prices. Costco customers do not hesitate to buy unfamiliar brands because of the positive image of the company. Best quality in best prices is one of the attribute that brings Costco customers back to the warehouse. This has allowed the company to grow its market share and increased its customers.
Costco value its full time as well as part time employees. Its …show more content…

Customer usually prefers a large array of the products and a one-stop shop options. Its competitors like Wal-Mart and Home depot offers a large selection of the products. Thus, limited product offering may act as a competitive disadvantage for Costco.
Costco’s philosophy of giving high salary to the employees while maintain low margins may reduce the company revenue significantly in the long term.
Opportunities:
Costco is currently the second largest retail store in the world after Wal-Mart. It has 672 ware house in United States. The company operates in many other countries apart from U.S and Canada. Costco has a major opportunity in China and India. If the company opens up its warehouse in these two countries, it will attract more customers.
Increase in the online shopping is also a good opportunity for Costco. The biggest fear for the customers while shopping online is the distrust and poor quality of the product. Costco already has a very positive image in the society. Customers would not hesitate to buy online even the products like furniture. Thus, help Costco to decrease its inventory cost and may give competitive advantage over Amazon. …show more content…

For example if some woman is using Ajex liquid dish soap to wash dishes for ages and you ask her to try another brand, she may refuse even if the other brand is better or cost effective.
Conformation Bias:
Conformation bias is the tendency to search for, interpret, focus on and remember information in a way that confirms one's preconceptions. (Ref: Wikipedia.org)
This kind of biasness occurs when people remember or recall information selectively in order to confirm their prior beliefs. For example, people who believe that Asians are more creative and hardworking people then the rest of the world. Whenever they meet a person that is both, Asian and hardworking they place a greater importance to their prior belief. This individual might even find out proof to further back up his/her belief.
Conformation bias not only affects how people recall information but it also influences how they gather information. For example if a particular individual believes in gun control. He will seek news and stories that endorse the limitations of gun ownership. When he hears the news of gun, shooting in the media it supports his prior opinion about gun control.

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