Swot Analysis For Costco

Analysis:

Costco’s success is related to the company capabilities and resources to helps Costco managers single out and focus on all the factors needed to craft a winning strategy that fits the company’s overall internal and external situation. Following, we will proceed with the Costco’s SWOT analysis. For instance, the SWOT analysis is a simple but powerful tool for sizing up a company’s completely relevant strengths and weaknesses, its market opportunities, and the external threats to its future well – being (Thompson, 2018).

Internal Analysis:

Strengths:

A distinctive competency in price: Costco sell products at very low prices than competitors do and builds big warehouse style superstores that contain extensive selection of products at lower price. Costco’s mission statement is to provide

customer with quality goods and service at the lowest possible prices. According to Costco wholesales 2017 annual finance report, Costco net sales increased $ 10,99 or 9% during 2017 compared to 2016 due to a 4 %, increase in comparable sales and the benefit of one additional week of sales in 2017.
Low employee turnover: Costco’s offer high wages and competitive benefits package that creates loyal employees.

High quality product a low cost: “Costco is able to offer lower prices and better values by eliminating virtually all the frills and costs historically associated with conventional wholesalers and retailers, including salespeople, fancy buildings, delivery, and accounts receivable” (Thompson, 2016).

Strong Brand Name: Costco has crated a very loyal customers base by providing customers with high quality products, low prices and merchandise selection. This has allowed Costco’s to grow its market share and increase its customer base from its beginning.

Technology: Costco operated websites in the United States, Canada, Mexico, the United Kingdom, and Korea- both to enable members to shop for many in store product online such as sofas, beds, TV, and office furniture (Thompson, 2016).

Strong Supply Chain: Costco’s supply chain had been a key element for the growth of the company. Costco had direct buying relationships with many producers of national brand name merchandise and with manufactures that supplied its Kirkland signature products (Thompson,

2016).
Weaknesses:
Limited product mix: Costco offer a limited product mix, compared to the wider selection available from competitors like Walmart. For example, Costco stocks about 4000 products in its warehouse, while Walmart stocks about 5000 products and BJ’s 7000 products.
Geographic dependence: Costco success is highly dependent on its U.S market. For example, for year 2017, US contributed to (93889/ 129025) = 73% of its total revenue, Canada contributed to (18775/ 129025) = 15%, others international operations contributed to (16361/129025) 12%. This can be threatening to Costco depend of one market since rivals can take advantage of this weakness.