Costco Corporate Office Contacts – What To Consider..

The objective of this memo is to assess Costco’s overall performance compared to Sam’s Club and BJ’s.

Costco Wholesale Corporation is really a wholesale club that needs customers to get annual memberships in order to shop at their stores. Costco’s main competitors were Sam’s Club and BJ’s Wholesale. Costco purchased Price Club in 1993 which enabled it to survive in the competitive wholesale industry. Additionally, it adopted a strategy that was different when compared with its major competitor, Sam’s Club This enabled to become the biggest wholesale club in the business in 2001.

I. Costco’s Performance with regards to BJ’s

Once I compared Costco’s total revenues with BJ’s total revenues in Exhibit 5 of FIN 197 Seminar in Finance case book, I found that Costco’s total revenue were increasing at an increasing rate excluding year 2000 to 2001. BJ’s on the other hand, had growing revenues until 1999 when their revenues then began to grow in a declining rate.

Costco features a higher membership fee and a lot more and this enabled Costco’s total revenue to get higher than BJ’s. This membership fee is very important since it is the key contributor to the company’s bottom line since sales excluding membership fees barely covers operating expenses. Costco also has more warehouses and much higher sales per store. Costco has warehouses in numerous international locations while BJ’s just have warehouses in america. However, Costco includes a lower operating and gross margin which shows that BJ’s has better operations and better product prices than Costco. Costco’s inventory turnover ratio is outstanding as it is much larger than BJ’s. This clearly demonstrates that Costco posseses an excellent operating efficiency.

II. Costco’s Performance with regards to Sam’s Club

Sam’s Club, on the other hand, has more members and warehouses in comparison with costco reviews that makes it Costco’s largest competitor. However, Costco had larger total revenues, sales per store and operating income due to the strategy. This can be because Costco is a lot more internationally dispersed in comparison to Sam’s Club as it has more warehouses in international locations. I am not able to compare Costco’s financial statement performance with Sam’s Club because Sam’s Club details are joined with Walmart.

III. Costco’s core strength and strategy

Costco pursues the technique of concentrating on lowering the unit price of goods and purchasing few Stock Keeping Units (SKUs) looking at the vendors which enable production savings.

Costco’s core strength is made to provide it with higher total revenues as well as to create value to the customers. Their core strength can be divided into two:

• Targeting a wealthier group of small businesses and middle-class shoppers which is different from Sam’s Club.

• Refusing to mark up products a lot more than 14 percent on the distributor’s price

Costco’s technique is really efficient in providing it having a competitive edge over its competitors BJ’s and Sam’s Club. This is undoubtedly a long-term value enhancing strategy because costco store hours is to create value to their customers. They vpaisq definitely obtain many loyal and satisfied customers that do not mind paying a higher membership fee to sign up with Costco. Costco is yet another very ethical company as they are not implementing a technique which serves to reduce their costs and cheat customers of the funds in an indirect way.

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