SWOT Analysis for Value Costco, a Membership Club House

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Value

Costco, a membership warehouse club that provides their members with merchandises sold at the best prices “on quality brand-name merchandise” (Costco.com, 2014). With more than hundred locations in the United States alone, it provides their customers with a wide range of merchandises ranging from groceries to electronics and luxury items. Costco achieves selling their merchandise at the “best prices” through making bulk purchases of stocks, which translates to getting more discounts from suppliers. Their merchandises are also sold at no more than a 15% mark up as compared to other supermarkets, a 25% mark up. Upon entry to the warehouse club, the items in the main aisle are arranged in such a way that customers get a preview of what is in store for purchase. The brands of their products that they carry also constantly changes giving their customers a sense of adventure where every visit is a hunt for something new. To give customers more value, 15% of their products are of the brand “Kirkland Signature”, Costco’s signature label where the merchandises are of comparable quality and cheaper than national brands.

Environmental Factors

PEST Analysis

Political

Costco’s close relations with unions have enabled for their wages, remuneration packages and employment standards uniform across all stores (D.umn.edu 2014). Having stores located worldwide means that Costco has to be mindful of the different laws and regulations that exist in the different countries and to be very careful not to go against any laws and regulations in the host country.

Economic and Socio-Cultural

Based on Costco’s financial report for the year ended September 1, 2013; their sales growth was 6.07% while it was 11.50% in 2012 and 14.07% in 2011 (...

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Marketing & Sales

Marketing efforts for Costco are through the use of direct mailers to prospective members. They get in touch with their current members through The Costco Connection, which is a magazine for their current members and it includes coupons, handouts and promotional information on merchandises that are up for sale (Costco Wholesale 2014).

Service

Besides selling groceries and household products, Costco provides their customers with a range of services from services for business to home and life. To name a few, they provide health & dental insurance, payroll services to auto & home insurance, mortgage purchase & refinancing, online investing services and personal health insurance (Costco.com 2014).

As for the services that can be found in their warehouse clubs, it ranges from food courts, to photo centers, pharmacies and gas stations.

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