Costco Stores – There Exists A Lot More Than Meets The Eye At This Website..

The goal of this memo is to analyze Costco’s performance in comparison to Sam’s Club and BJ’s. Costco Wholesale Corporation is actually a wholesale club that requires customers to buy annual memberships to be able to shop at their stores. Costco’s main competitors were Sam’s Club and BJ’s Wholesale. Costco bought Price Club in 1993 which enabled it to survive in the competitive wholesale industry. Additionally, it adopted a technique which was different as compared to its major competitor, Sam’s Club This enabled Costco to be the largest wholesale club in the market in 2001.

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

Costco includes a higher membership fee and much more and also this enabled what time does costco close today to be greater than BJ’s. This membership fee is essential because it is the main reason for the company’s main point here since sales excluding membership fees barely covers operating expenses. Costco even offers more warehouses and far higher sales per store. Costco has warehouses in numerous international locations while BJ’s have only warehouses in the united states. However, Costco features a lower operating and gross margin which demonstrates that BJ’s has more effective operations and higher product prices than Costco. Costco’s inventory turnover ratio is outstanding because it is larger than BJ’s. This clearly shows that Costco posseses an excellent operating efficiency.

Costco’s Performance in Relation to Sam’s Club – Sam’s Club, on the other hand, has more members and warehouses in comparison with Costco that makes it Costco’s largest competitor. However, Costco had larger total revenues, sales per store and operating income due to the strategy. This can be because Costco is a lot more internationally dispersed when compared with Sam’s Club since it has more warehouses in international locations. I am unable to compare Costco’s financial statement performance with Sam’s Club because Sam’s Club data is joined with Walmart.

III. Costco’s core strength and strategy – Costco pursues the technique of concentrating on decreasing the unit value of goods and purchasing few Stock Keeping Units (SKUs) from its vendors which enable production savings. Costco’s core strength was created to provide it with higher total revenues and also to create value to the customers. Their core strength can be split 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 a lot more than 14 percent on the distributor’s price

Costco’s technique 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 primary goal would be to ctqosf value to their customers. They will definitely obtain many loyal and satisfied customers who do not mind paying a higher membership fee to join Costco. Costco is another very ethical company as they are not implementing a technique which serves to reduce their costs and cheat customers of the funds in an indirect way.

I have been part of Costco for two yrs with a business professional membership. I personally use Costco for many of my company purchases and so i switched to only using Costco rather than having both memberships. Bjs and Costco carry a lot of the same things. Costco features a more ofice supplies, toys, etcs I need for my online retail business.

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

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