Costco Corporate Office Contacts – Things To Consider..

The objective of this memo is to analyze Costco’s performance in comparison to Sam’s Club and BJ’s.

Costco Wholesale Corporation is really a wholesale club that needs customers to buy annual memberships in order to purchase at their stores. Costco’s main competitors were Sam’s Club and BJ’s Wholesale. Costco purchased Price Club in 1993 which enabled it to live in the competitive wholesale industry. In addition, it adopted a method which had been different when compared with its major competitor, Sam’s Club This enabled costco home office to be the biggest wholesale club in the market in 2001.

I. Costco’s Performance with regards to BJ’s

After I compared Costco’s total revenues with BJ’s total revenues in Exhibit 5 of FIN 197 Seminar in Finance case book, I discovered that Costco’s total revenue were increasing with an increasing rate except for year 2000 to 2001. BJ’s on the other hand, had growing revenues until 1999 when their revenues then started to grow in a declining rate.

Costco has a higher membership fee and a lot more which enabled Costco’s total revenue to get more than BJ’s. This membership fee is vital since it is the primary contributor to the company’s bottom line since sales excluding membership fees barely covers operating expenses. Costco also offers more warehouses and much higher sales per store. Costco has warehouses in numerous international locations while BJ’s just have warehouses in america. However, Costco features a lower operating and gross margin which shows that BJ’s has better operations and higher product prices than Costco. Costco’s inventory turnover ratio is outstanding because it is much bigger than BJ’s. This clearly shows that Costco posseses an excellent operating efficiency.

II. Costco’s Performance with regards to Sam’s Club

Sam’s Club, on the other hand, has more members and warehouses when compared with costco reviews that makes it Costco’s largest competitor. However, Costco had larger total revenues, sales per store and operating income because of its strategy. This is also because Costco is more internationally dispersed in comparison to Sam’s Club because it has more warehouses in international locations. I am just unable to compare Costco’s financial statement performance with Sam’s Club because Sam’s Club information is joined with Walmart.

III. Costco’s core strength and strategy

Costco pursues the strategy of centering on lowering the device price of goods and getting few Stock Keeping Units (SKUs) looking at the vendors which enable production savings.

Costco’s core strength is made to provide it with higher total revenues and also to create value to the customers. Their core strength can be divided into two:

• Targeting a wealthier selection of small businesses and middle-class shoppers which is different from Sam’s Club.

• Refusing to mark up products a lot more than 14 percent on the distributor’s price

Costco’s method is really efficient in providing it with a competitive edge over its competitors BJ’s and Sam’s Club. This is undoubtedly a long-term value enhancing strategy because costco easter hours is always to create value to their customers. They vpaisq definitely obtain many loyal and satisfied customers that do not mind paying a higher membership fee to join Costco. Costco is also a very ethical company since they are not implementing a technique which serves to lessen their costs and cheat customers with their cash in an indirect way.

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