Costco Corporate Office Contacts – What To Look For..

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

Costco Wholesale Corporation is really a wholesale club that requires customers to get annual memberships in order to look 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 inside the competitive wholesale industry. In addition, it adopted a technique which had been different as compared to its major competitor, Sam’s Club This enabled costco reviews to get the biggest wholesale club in the business in 2001.

I. Costco’s Performance in terms of 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 in 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 features a higher membership fee and much more which enabled Costco’s total revenue to be higher than BJ’s. This membership fee is very important because it is the key cause of 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 have only warehouses in the united states. However, Costco has a lower operating and gross margin which demonstrates that BJ’s has more efficient operations and higher product prices than Costco. Costco’s inventory turnover ratio is outstanding because it is much larger than BJ’s. This clearly shows that Costco has an excellent operating efficiency.

II. Costco’s Performance in terms of Sam’s Club

Sam’s Club, on the other hand, has more members and warehouses in comparison with costco customer support which 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 much more internationally dispersed compared to Sam’s Club as it has more warehouses in international locations. I am struggling 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 centering on lowering the system value of goods and buying few Stock Keeping Units (SKUs) from the vendors which enable production savings.

Costco’s core strength was created to provide it with higher total revenues and to create value to its customers. Their core strength can be divided into two:

• Targeting a wealthier number 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 strategy is really efficient in providing it using a competitive edge over its competitors BJ’s and Sam’s Club. This is definitely a long-term value enhancing strategy because what time does costco close would be to create value to their customers. They vpaisq definitely obtain many loyal and satisfied customers who do not mind paying an increased membership fee to sign up for Costco. Costco is yet another 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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