Essay on Costco: Internal/External Analysis

Words: 7771
Pages: 32

Costco:Internal / External Analysis

Table of Contents
• About Costco
• Mission Statement
• Corporate Governance & Stakeholder Management
• Locations
• Strategic Objective
• Primary Activities
• Support Activities
• Costco Membership
• Financial
• Net Income
• Net Sales
• Membership Fees
• Gross Margin
• Selling, General & Administrative Expenses
• Cash Flows
• Expansion Plans
• Conclusion
• Demographics
• Socio-cultural
• Political/Legal
• Technological
• Economic
• Global
• Environmental Scanning
• Environmental Monitoring
• Competitive Intelligence
• Environmental Forecasting
• Competitive Environment
• Porter’s Five Forces
• Threat of New Entrants
• The
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This allows price changes without remarking merchandise. Substantially all manufacturers provide merchandise pre-marked with the item numbers and bar codes and many provide special, larger package sizes. Costco seeks to limit specific items in each product line to fast selling models, sizes, and colors. Therefore, the company carries an average of approximately 4,000 active SKU’s per warehouse in its core warehouse business, as opposed to discount retailers and supermarkets that normally stock 40,000 to 60,000 SKU’s or more. Many consumable products are offered for sale in case, carton or multiple-pack quantities only. Appliances, equipment and tools often feature commercial and professional models.
One of Costco’s cardinal rules is that no branded item can be marked up by more than 14 percent, and no private-label item by more than 15 percent. In contrast, supermarkets generally mark up merchandise by 25 percent and department stores by 50 percent or more. (6) Costco saves 2 percent a year in costs because it rarely spends money on mass-media advertising. Marketing and promotional expenses are usually limited to new warehouse openings. Costco effectively targets small business owners as its primary target audience. Operating largely under the radar of the general public, Costco has many marketing representatives who are attached to each store and whose continual task is to network with business owners.