Public Domain Costco Wholesale Corporation continues adjusting to the external factors in the retail industry environment, as shown in this Five Forces analysis. While all of these external factors influence Costco, they differ in terms of their effects on the firm. These intensities may change over time.
The company has been reporting good results in recent quarters, as it is benefiting from strong demand from both U.
Standout categories include Fresh Foods, which reported low double-digit growth in the fiscal first quarter of ended November 23,Food and Sundries high single-digitand Hardlines mid-single digit. Lower gas prices have had a mixed effect on results.
But with lower gas prices, many customers are not as concerned about finding the best deal. The question is whether the trend will continue, or if the ride will start to slow down in the coming quarters. We will address the short-term concerns, as well as long-term opportunities, that the stock offers.
The Business Costco and its subsidiaries began operating in in Seattle, Washington. It engages in the operation of membership warehouses in the U.
It also has majority-owned subsidiaries in Taiwan and Korea. The company strategy is to offer its members low prices on a limited selection of nationally branded and Costco value chain analysis private-label products in a wide range of merchandise categories.
This will typically produce high sales volumes and rapid inventory turnover. Too, the operating efficiencies achieved by volume purchasing, along with efficient distribution and reduced handling of merchandise in a no-frills warehouse, allows the company to operate profitably at lower gross margins than traditional wholesalers, mass merchandisers, supermarkets, and supercenters.
Products sold include food dry and packagedsundries tobacco, beverages, cleaning supplieshardlines major appliances, electronics, beauty aidsfresh food, softlines apparel, home furnishingsand ancillary and other gas stations, pharmacy, food court.
By using a membership format, and strictly controlling the entrances and exits of its warehouses, Costco has lower inventory losses than those of other discount retail operators.
The company had aboutemployees at the end of fiscal Its headquarters are in Issaquah, Washington. These bring customers back to the warehouse, since they have the belief that they are in fact getting the best price on a wide array of products.
The company also uses its gasoline business to draw members to warehouses.
While this business is relatively lower margined than others, it again drives higher volumes of other higher-margined products.
This has allowed the company to grow market share and increase its customer base over the years. Sales in the U.
While Costco has a fairly broad customer base, it is more skewed toward older baby boomers. As these customers age, they tend to spend less.
The company needs to try and attract younger customers, including Generation X and Y, who are savvier e-commerce shoppers.
We discuss this opportunity in more detail below. Opportunities Attracting Younger Customers: In recent months, management has taken steps to attract younger customers to its stores. These shoppers, between the ages of 19 and 34, should help to drive longer-term sales and earnings at Costco.
The company is attracting these customers in several ways. It is making it more convenient for them to shop by using services such as Google Express and InstaCart.
It is also offering better, higher-quality brands on the apparel side of the business. The company has also been using promotions, including Living Social, which should attract a younger customer base.Value Chain Analysis For Costco Words | 4 Pages The purpose of this paper is to do a value chain analysis of Costco, identify their resources and capabilities, to conduct a SWOT analysis to identify the opportunities in which they are lagging and to form a strategy to move forward using the recourses and capabilities in the direction of.
Value Chain Analysis-Costco Corporation Brief on the Organization Costco is among the leading global retailers which provide customers a wide range of merchandise, ranging from small to well-known brands.
Transcript of Supply Chain Logistics Analysis: Costco Wholesale Corporation. Conclusion Logistics Mission: Deliver high quality goods and services at the best possible value Logistical Value Proposition: "Value-Based"/"Price Minimizer" Few product categories Supply Chain Logistics Analysis Costco Wholesale Corporation QUESTIONS?
By. Value Chain Analysis-Costco Corporation Brief on the Organization Costco is among the leading global retailers which provide customers a wide range of merchandise, ranging from small to well-known brands.
The company began operations in Over the years. Value Chain The value chain also chain as value chain analysis is a concept from business management that was first described and populated by Michael Porter in A value chain is a chain of activities for activities for a firm operating in a specific industry.
Value Chain Analysis for Costco. 1 pages words. This is a preview content. A premier membership is required to view the full essay. View Full Essay. Value Chain analysis for Costco. Costco’s value chain is successful at exploiting strengths, skills, and capabilities to leverage.