Costco Wholesale Corporation is a company that is registered in the United States business registration act. The Costco Wholesale Corporation began operating in Washington and has joint with Price Company in order to improve its performance,1. The company operates on low priced products on a wide range of products hence producing high sales volume, 2. Costco Wholesale Corporation has various strengths and weakness as well as opportunities and threats that determine its operation.
Costco Wholesale Corporation faces various opportunities and threats that influence the running of the company. One of the opportunities that are available for Costco Wholesale Corporation is increased demand for private label products. The company specializes in the marketing of private label products and in the recent past, many people are in need of the private label products and this creates an opportunity for Costco Company to get higher profits. In addition, there is increase in online sales which is likely to lead to increased sales volume for the company. Increase in online sales creates an opportunity for Costco Wholesale Corporation to increase its customers hence increased profits, 3. The other opportunity at Costco Wholesale Corporation is the increase in market availability. There is an increased number of clients willing to purchase the products offered by Costco Wholesale Corporation and this creates a room for expansion of the company. Although Costco Wholesale Corporation has great opportunities that can help it to expand, the company faces various threats. One of the threats faced by this company is that the consumers have low confidence of the services offered in the company and this leads to low profits because the consumers do not purchase goods well. In addition, the company faces threats from other similar companies. This increased competition is a threat to the operation of the company and can lead to reduced profits. The other threat to Costco Wholesale Corporation is sub prime crisis which is also likely to negatively affect the running of the company,4. Economic factors such as inflation, energy cost and increased debts are other threats to the operation of Costco Wholesale Corporation which may affect the company’s profits.
Costco Wholesale Corporation has various strengths and weaknesses which affect its operation. One of the strengths of this company is that it has a strong market position. The company has a good location and has acquired a large number of customers which give it a good market position, 5. Another strength of Costco Wholesale Corporation is that the company incurs low cost of advertising and marketing for its products. The company offers high quality goods and services and does not need to do extensive marketing and promotions in order to get customers,6. This helps to ensure that the company incurs reduced expenses in marketing its products. The other strength of Costco Wholesale Corporation is that the company offers a wide range of products and services that make it to have many customers hence enjoy increased profits. In addition, the company sells its goods at reduced costs and this helps to attract and retain customers. Although this company has strengths which enable it to operate efficiently, the company has weaknesses which limit its success. One weakness of this company is that it has a weak compliance to function. The company does not properly comply to its functions and this affects its performance. The other weakness of the Costco Wholesale Corporation is that it has concentrated its operations in a single market,7. The company has not expanded its operations into various markets and this makes it to have clients from just a single area. Costco Wholesale Corporation does not have fast response to customer trends thus losing customers. In addition, Costco Wholesale Corporation does not have quality control. This is caused by inaccurate and untimely financial results brought about by the lack of internal control, 8. Another weakness of Costco Wholesale Corporation is that the company lacks positive loyalty and brand recognition. This makes the company to have reduced number of customers because they do not have positive loyalty to the products.
- SWOT analysis of Costco Wholesale Corporation
- Strengths
- Has a strong position in the market
- Incurs low promotion and advertising cost
- Offers a wide range of products
- Sells at low prices hence attracting more clients
- Weaknesses
- Concentrates its operation in a single market
- Has a weak conformity to its functions
- Has no quality control
- No loyalty and brand recognition
- Untimely response to the new customer trends
- Opportunities
- Increase in online sales
- Expansion of the market
- Growing demand for their private label products
- Threats
- Low consumer confidence
- Economic factors e.g. inflation, energy cost and increased customer debts
- High competition
References:
Books C. Costco Wholesale Business Background Report. 2009. New York. Choice level
Publishers
Donelson B. Costco wholesale. 2011. Web. Retrieved on 22nd July 2011 from
http://www.yousigma.com/comparativeanalysis/costcowholesale.html
Form 10-k. Costco Wholesale Corporation. 2010. Web. Retrieved on 22nd July 2011
From http://sec.gov/Archives/edgar/data/909832/000119312510230379/d10k.htm
