Daniel Bernards Austin Hutcheson Nicole Stefanek.
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Transcript of Daniel Bernards Austin Hutcheson Nicole Stefanek.
Company Overview Costco operates an international chain of
membership warehouses, mainly under the “Costco Warehouse” brand name
Headquarters are located in Issaquah, Washington and employs about 142,000 people nationwide
Provides a limited selection of nationally branded and private-label products across a wide range of merchandise categories at lower prices than competitors
Known for their bulk merchandise
Company Overview Recorded revenues of $72,483 million in
the financial year ending in August 2008 Net profit was $1,282.7 million in the same
financial period Size of stores range from 70,000 to
205,000 square feet Carries an average of about 4,000 active
SKU’s per warehouse, compared to competitors averaging about 40,000 to 140,000 SKU’s
Primary Merchandise Offerings Broad categories include:
Sundries, hardlines, food, softlines, fresh foods
Besides branded products, Costco offers a range of private label products under the brand name Kirkland SignatureVarious categories: juice, cookies, coffee,
tires, housewares, luggage, appliances, clothing, detergent
Other Retail Formats “Costco Home”
Offers home furnishings and décor products including window treatments, carpeting, and cabinetry
Locations: Washington, Arizona “Costco Business Center”
Customized products for food service, convenience stores and offices
Office supplies, furniture, machines and break room supplies, convenience store supplies and resale items, espresso shop/stand supplies, restaurant supplies, equipment, and ingredients
Strengths Strong market position
5th largest retailer in the US and 8th largest in the worldRanked 29th in the Fortune 500 list of America’s
largest corporations based on sales Rapid inventory turnover rate
High inventory rate reduces cost and shrinkageIn 2008, inventory turnover rate was 12.8, compared
to its competitors:○ BJ’s Wholesale Club 9.4○ Wal-Mart 8.3○ PriceSmart 8.9
Low Marketing Costs
Weaknesses
Concentrated presence in California27% of net sales in 2008
Lax quality controlPurchases from foreign and domestic
vendors gives them limited control over the quality of the products
Opportunities
Growth in online retailingRetail spending in U.S. was $128 billion in
2007, and is expected to reach $215 billion by 2012
Shifting of consumer demand towards private label productsThe purchase of high priced items has
shifted to affordable private label products
Threats
Impact of intense competitionWal-Mart’s Sam’s Club, BJ’s Wholesale
Club, and Target
Consumer confidenceEconomic slowdown in the global economyAffects the discretionary consumer spending
as consumer gets cautious about job security and debt level