Blog 12 - Costco

 Juan Enrique Millet Zapata

Costco

 

The mission of Costco is to offer the best quality in each of their products and services that they offer at the lowest possible price.

The vision of Costco is to be a place where efficient buying and operating practices give members access to unmatched savings.

And they based their values in four important aspects, obey the law, caring for their partners, caring for their employees, respect their suppliers. They do all of that to achieve their final objective which is to reward their shareholders.

They have a lot of strategies but some are successful and other ones are unsuccessful: 

Successfull:

Ø  They use a membership that give 

them low prices on limited high quality 

national and private branded 

products.

Ø  Generates a high sales volume and 

rapid inventory turnover that 

generally allows it to take advantage 

of selling and receiving cash for 

inventory and getting payment 

discounts.

Unsuccesful:

Ø  His business model depends heavily 

on repeat shoppers buying 

memberships.

Ø  Costco faces risk from changing 

consumers preferences because its 

model depends on high volumes of 

sales.

His Swot Analysis is something like this:

Strengths:

v  Lows prices

v  Strong brand

v  Doesn’t waste money on 

v  advertising 

v  Strong membership

Opportunities:

v  Appeal to conscientious 

v  shopper

v  Expand into foreign

v  stable markets

v  Online Presence

Weaknesses:

v  Burden of high wages paid to worker

v  Low price margins 

v  Small Marketing budget compared to discount 

v  retailers and super markets.

Threats:

v  Aggressive price competition by rivals

v  Political complications in foreign 

v  markets 

v  Cannibalization

Costco social contribution:

They focus on programs supporting children, education, and health and human services in the communities where they do business. They receive a large number of requests of nonprofit organizations striving to make a positive impact.