Environmental Factors Affecting Costco

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Environmental Scanning Costco
Key environmental forces that helped Costco in the beginning
The key environmental forces that helped Costco in the beginning would have to be competition, social and cultural forces, population and resources. These environmental forces helped Costco’s growth significantly easy in the beginning. With these forces is has helped that company become ranked 18 largest firm in the Fortune 500 (Soni 2016).
When the company first began, there wasn’t much competition because there was very few wholesale companies around. With there not being an extensive amount of wholesale companies around it made it extremely easy for Costco to take off at the beginning. The wholesale companies that were present when Costco took off …show more content…

Communities accepted the large business and was pleased with the products offered and the prices for such quantities that they could buy. The lifestyle of the community around made a ready market for the products that Costco was supplying (Daft & Marcic 2016). As the company grew with the consumers interests in mind they didn’t have much rejection in which caused them to grow.
They based the locations of the company in highly populated areas which meant that the ready market wasn’t exploited to the full potential. With not so much competition Costco had extremely high sales because the number of customers willing to shop for bulk items. With the proper placement in the populated areas it provided and overflowing market the products that Costco offered to their customers.
Costco being a wholesale company they needed a large number of employees to meet the demand of the customers. With the placement of their locations in high populated areas made it easy for Costco to find suitable employees to work in the stores. The number of employees needed to operate was so large that it increased the stores productivity which helped to grow and succeed in the market of wholesale.
The five environmental forces that affect Costco …show more content…

With the new competition coming in offering better pricing its making it harder for Costco to survive in the market.
Regulatory
There are new regulations that come out every year that has been affecting the operations of Costco such as wage increases and how employees should be treated by companies. With the new regulations that are set by the government Costco has to abide by them which has increased pricing and lowered their employment.
Trends that are likely to influence Costco’s marketing efforts in the future
The competition level of having an excessive number of wholesalers in the market Costco’s trend that will make the company is their marketing efforts. There has been an increase in the level of competition in alternative products in the market. In this case for Costco to survive they will need to improve their marketing techniques.
Strategy to counter competition
The strategy that Costco will need to use would be offering a better quality and price on their products. By doing this they will meet their customers’ needs and challenge their competitors who may offer a lower quality product at a higher

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