Costco Stores – Explore Our Site Now To Look For Extra Information..

The objective of this memo is to evaluate Costco’s performance when compared with Sam’s Club and BJ’s. Costco Wholesale Corporation is a wholesale club that needs customers to buy annual memberships in order to shop 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 survive in the competitive wholesale industry. It also adopted a method that was different in comparison with its major competitor, Sam’s Club This enabled Costco to be the largest wholesale club in the business in 2001.

Costco’s Performance in Relation 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 found that Costco’s total revenue were increasing with an increasing rate excluding year 2000 to 2001. BJ’s on the other hand, had growing revenues until 1999 when their revenues then begun to grow with a declining rate.

Costco includes a higher membership fee and much more and this enabled what time does costco close today to be higher than BJ’s. This membership fee is vital since it is the key contributor to the company’s bottom line since sales excluding membership fees barely covers operating expenses. Costco also offers more warehouses and a lot higher sales per store. Costco has warehouses in lots of international locations while BJ’s just have warehouses in america. However, Costco includes 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 since it is larger than BJ’s. This clearly demonstrates that Costco comes with an excellent operating efficiency.

Costco’s Performance with regards to Sam’s Club – Sam’s Club, on the contrary, has more members and warehouses when compared with Costco 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 because Costco is more internationally dispersed when compared with Sam’s Club because it has more warehouses in international locations. I am just not able to compare Costco’s financial statement performance with Sam’s Club because Sam’s Club details are joined with Walmart.

III. Costco’s core strength and strategy – Costco pursues the technique of concentrating on decreasing the unit value of goods and buying few Stock Keeping Units (SKUs) looking at the vendors which enable production savings. Costco’s core strength is designed to provide it with higher total revenues and also to create value to its customers. Their core strength can be separated into two:

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

• Refusing to mark up products greater than 14 percent over the distributor’s price

Costco’s strategy is really efficient in providing it with a competitive edge on its competitors BJ’s and Sam’s Club. This is surely a long term value enhancing strategy because Costco’s main goal would be to ctqosf value for their customers. They are going to definitely obtain many loyal and satisfied customers that do not mind paying a higher membership fee to sign up with Costco. Costco is another very ethical company since they are not implementing a technique which serves to reduce their costs and cheat customers of the cash in an indirect way.

We have been a member of Costco for a couple of yrs using a business professional membership. I personally use Costco for a lot of of my company purchases and so i switched to simply using Costco instead of having both memberships. Bjs and Costco carry most of the same things. Costco has a more ofice supplies, toys, etcs I want for my online retail business.

I feel Costco and Bjs are equally professional and offer good customer support. BJs has the benefit of accepting MFR coupons and accepts all major credit cards! Costco only accepts checks and American Express in their warehouses (they actually do accept all major bank cards online though) BJs lines manage to move very quickly, as well as their aisles, at the very least on the ones I have gone to, are better organized.

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