Costco Wholesale Corporation Mission Business Model and Strategy Essay

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Pages: 17

Costco: Marketing Audit
I. Company Description
In September of 1983, Costco Wholesale Corporation began operations in Seattle, Washington. The company was founded by James Sinegal, current President and CEO of Costco, and Jeffrey Brotman, Chairman of the Board of Directors. In October of 1993 Costco merged with a Delaware company called The Price Company to form Price/Costco, Inc. The Price Company was the first to establish the concept of a membership warehouse. In 1999, the company changed its name to Costco Wholesale Corporation and moved themselves back to Washington. Costco is currently one of the largest retail stores in the industry.

II. Business Mission
Costco’s mission statement is to focus on bringing high quality goods
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A large portion of Costco’s customers are businesses. Start up businesses use Costco to purchase office furniture, supplies, and other products that will help run a business. While many established businesses rely on Costco to maintain their performance through a variety of goods and services. Costco also attracts individuals not connected to businesses seeking quality goods and services at discounted prices. Costco gains business from pretty much anyone in the general area of a Costco warehouse. Families large and small are all members of the warehouse club store. Most families tend to be middle to upper class. People will join the warehouse if they believe that the value they receive from Costco’s products and services will cover the $50 dollar membership fee. More than a third of Costco’s 48 million customers have a household income over $75,000 and they average 22 visits a year (Boyle 2006).

Technology: Radio frequency identification (RFID) is the latest trend in the retail industry. Inventory can be very costly and time-consuming to most retailers. By offering real-time inventory visibility, radio frequency identification enables inventory managers to monitor and control inventory supply at all times. By automating the inventory tracking process, stores can keep costs down by maintaining optimal inventory levels. With RFID, stores will not over stock and will also have the appropriate number of items at their