The Costco Corporation is a network of wholesalers operating in the United States, Canada, United Kingdom, Taiwan, Korea, Japan and Mexico. The primary objective of Costco Corporation is the administration of the network of subordinate warehouses, which provide quality goods for competitive prices. The level of the prices established within the network is usually lower than those offered by the local competitors. Thus, the company assists local retailers to reduce cost and successfully operate in the competitive environment. Besides, the company serves not only legal persons; any physical person may become the customer of Costco Warehouse as well.
In order to become the customer of the warehouse, a potential client should pay a defined annual fee. The assortment of the suggested products astonishes with its variety. The available goods range from groceries and candies to furniture and electronic devices. The company provides the highest quality goods of national brands for the lowest prices suggested by other wholesalers. The company manages to maintain prices on such a low level by means of eliminating costs usually accompanying traditional wholesalers. For example, they neither spend money on the shop assistants, nor they have delivery expenditures, like traditional department stores.
In the USA, the main competitor of the Costco Corporation is considered to be Wal-Mart, the similar company with the same class of customers and very similar sort of products provided. According to the recent reports, Costco has beaten most of the Wal-Mart sales records and has come to the leading position among the customers as the number one supplier of variable products, though Wal-Mart is well-known and popular market-system. But will this situation last any longer? What will happen with the Costco Corporation in the next three years? Let us try to analyze it based on the latest data from Costco.
The first argument for Costco is its convenience. Everyone would find Costco supermarket maximum fifteen minutes drive from the point he is now. Otherwise, the company provides delivery service all around the country. In any case, the products you order get to you no later than two days after order placement.
The second argument that is for sure one of the most reasonable arguments ever is the price. According to the customers’ opinion, Costco stores attract numerous clients by the pricing policy towards their products. I do not feel like putting down any other corporation, but Costco looks really appealing with the prices they put on the products. The same goods would cost at least a little bit more in the Wal-Mart store. The difference in price is not significant if you purchase only few things, but it is attractive enough to make customers purchase more of the same item and head to another department of the store to make even more purchases.
The third argument I want to point out is the well-known Costco strategies. You can get clothes (let us say, sweater) in some other store of the similar type for twenty dollars. If you go to Costco store, you would get the similar sweater for fifteen dollars, and the most amazing thing is that the one you get from Costco would be of the better quality and brand, like Nike for instance. As for Costco offers very good sales and flexible discount systems, you would finally get more then just one sweater for yourself. At last you would find yourself very happy leaving the store and having minus fifty dollars in your wallet instead of fifteen you primarily planned to spend. Thus, offering products of the higher quality but of the lowest prices that they can put, Costco managers have chosen very successful policy, as for anyone would obviously have the better good than the worse for the same low price.
I am sure (and anyone would have an opportunity to check whether I was right or wrong in a few years) that this corporation will grow rapidly. In three years – by the year 2008 – it will expand and grow twice, and its sales growth will be at least three times higher. As for me personally, I positively cheer for Costco.
1. Volchok P. Entertaining the Costco Way. 2002. Costco Wholesale: First Edition.
2. 2.Gerston L. The Costco Experience: An Unofficial Survivor’s Guide. 2003. eReads.com