Costco

Welcome again to my weekly blog. On this occasion I’ll be talking about Costco, but not like the stuff you already know, I’m going to tell you about their mission, vision and values; a successful strategy they used, an unsuccessful strategy they used but didn’t work out, some of their competitors and the difference between them and Costco, a short swot analysis of the brand, one need that they are solving with one of their products and a social contribution.

First let’s see their mission, vision and values. Mission: Their mission is to offer the best quality in each of their products and services that they offer at the lowest possible price. Vision: A place where efficient buying and operating practices give members access to unmatched savings. Values: They based their values in four important aspects. Obey the law, caring for their partners, caring for their employees, respect their suppliers. All of that to achieve their final objective which is to reward their shareholders. 

A successful strategy they used was using  a membership that give them low prices on limited high quality national and private branded products.

This strategy generates a high sales volume and rapid inventory turnover that generally allows it to take advantage of selling and receiving cash for inventory and getting payment discounts.

And an Unsuccessful strategy they tried was that their  business model depends heavily on repeat shoppers buying memberships. Costco faces risk from changing consumers preferences because its model depends on high volumes of sales.

Now let’s mention their competitors, first we have Walmart. Walmart is a supermarket focused more on retail and does not require you to be a member of the store to buy there. Next it’s Target. Target has a business model of things of the best quality and that meets all the needs in one place while still being a supermarket where you can buy a toothpaste or the best phone. Finally there is Sam’s club. Sams club has exactly the same business model but with a slightly cheaper producer. 

Moving on we have the Costco SWOT analysis. Strengths:

● Lows prices

● Strong brand

● Doesn’t waste money on

advertising

● Strong membership

Weaknesses:

● Burden of high wages paid to worker

● Low price margins

● Small Marketing budget compared to discount

retailers and super markets.

Opportunities:

● Appeal to conscientious shopper

● Expand into foreign stable markets

● Online Presence

Threats:

● Aggressive price competition by rivals 

● Political complications in foreign

markets

● Cannibalization

The need that is being solved by one of their products is the computers since nowadays we need it to take our classes online because of the pandemic. 

To finish this blog a social contribution of Costco is their charity contributions Costco Wholesale’s primary charitable efforts specifically focus on programs supporting children, education, and health and human services in the communities where they do business. Throughout the year they receive a large number of requests from nonprofit organizations striving to make a positive impact, and they are thankful to be able to provide support to a variety of organizations and causes. They would like to respond favorably to all requests, understandably, the needs are far greater than our allocated resources and they are unable to accommodate them all.

Thank you for reading this blog I hope you enjoyed reading this post and I’ll see you next week in my next post.