Costco Competitive Analysis Essay

Words: 6083
Pages: 25

|Costco |
|ESC-Accounting and Finance |
| |
|This case analysis will analyze the efficiency and health of the organization. This |
|case analysis was created using the textbook and the Stanford Graduate School of |
|Business. Costco Wholesale Corporation Financial Statement Analysis (A) Case A-186A.|
|19 June 2003. |
| |

I. Executive Summary
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Members are treated like royalty at the highest level, the Executive Member, by offering discounted items such as homeowners and auto insurance, mortgage services, decreased merchant processing and health insurance rates for the business owners, and travel planning and discounts. In addition, those Executive level members enjoy a 2% earning reward on all purchases, to use on their “future” purchases at Costco. (Miller, 2011) Only five years into the turn of the century and Costco already is a household name with over 40.5 million members, generating over 105 million dollars in sales per store annually and over 226 million annually from which was originally launched in 1998 to offer its good and services to members over the internet. As competitors like Wal-Mart and Target began carrying more product lines and offering more services, Costco needed to make sure that their customers remained loyal. So in 2006, Costco began to deeply discount its generic pharmacy prescriptions, in counts of 100, to its members for $10.00 or less. That same year Costco was named one of the “most admired” companies by Fortune Magazine. (Boyle, 2006) In the years to come, sales exceeded 1 billion dollars annually, over 2.1 billion gallons of gas were sold annually, over