James Kidwell Brad Granger

Ashley Kerekanich

Company ProfileJim Sinegal, cofounder and CEO of Costco

WholesaleBegan in Seattle 1983Mission Statement: To continually provide

our members with the quality goods and services at the lowest possible prices

Business ModelGenerate high sales volume and rapid

inventory turnover by offering members low prices on a limited selection of nationally branded and selected private-label products in a wide range of merchandise categories

Target MarketConsumers who prefer low prices, limited

selection and treasure hunt shopping environment

Business MembershipsUrbanites

Nice neighborhoods not far from CostcoMiddle Age with above average incomesLarge families and consumers who only go

large bulk shopping an average of 23 times a year

CompetitorsSuper Savers????????BJ’s Wholesale Club

Offers wider range of productsFocuses on individual consumerClustering club locations

Wal-MartSam’s Club

AdvertisingLimited to direct mail programs

promoting selected merchandise to existing members

Occasional direct mail to new customersWOM (Word of Mouth)

existing consumers and acquaintances

Campaigns for new warehouse openingsTeams personally contact qualified consumers

Store LayoutTreasure hunt MerchandisingWarehouse

Clothing @ the centerElectronics in a cornerBakery and Meat in the back of the storeAlcohol in a cornerFood & Household/Business Supplies on

OutsideFurniture in the front and center

SWOTStrengths

Loyal customer base Products in bulk for cheaper Wide variety of inventory Affluent customers Employee retention Good management Return policy Low shrinkage Strong private label Membership to help small business Growth in more profitable customers

Opportunities Membership growth International opportunity E-commerce Advertising opportunities Increase self checkout

Weaknesses Lack of advertising No shopping bags No self checkout Less focus on individual customers Limited small quantity products Shorter weekend hours then

competitors Hard to find stores in some areas.

Threats Similar Competitors (BJ’s Sam’s Club) Cheaper bargain stores (Big Lots,

WalMart)

QuestionsDo any of you have your own Costco

membership?Do your parents own Costco MembershipsDo you enjoy the free samplesDo you agree with Costco’s limited selection?

ReferencesEssentials of Strategic Management- A quest

for the competitive advantageJohn E GambleArthur A Thompson Jr