Philippine Christian University

Dasmariñas Campus
Graduate School of Business and Management
Online Education and Professional Advancement

A SIMPLE STRATEGY AT COSTCO

I. SUMMARY
Background
Costco, in full Costco Wholesale Corporation, American operator of discount stores of the
type known as warehouse clubs or wholesale clubs, in which bulk quantities of merchandise are sold
at deeply discounted prices to club members who pay an annual membership fee. It is one of the
largest retailers in the world. Costco is based in Issaquah, Washington.

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A Costco store typically carries supermarket items and an ever-changing selection of other

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merchandise, including some luxury goods. The stock is stacked high in a cavernous “warehouse”

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enclosing more than 140,000 square feet (13,000 square meters) of floor space. Despite the large

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area, a Costco store typically stocks only about 4,000 different items at any given time, about one-
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tenth of the variety that is available at the average supermarket. Most Costco stores also
have ancillary businesses such as pharmacies and gasoline stations.
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Name of Organization/Company: Costco Wholesale

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Central Character: Costco Wholesale Corporation (doing business as Costco Wholesale and also
known simply as Costco) is an American multinational corporation which operates a chain of
membership-only (needing a membership to shop there) big-box retail stores (warehouse club).
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II. CHARACTER/PLAYERS
Main Character/players: Costco Wholesale
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Supporting Character/players: Customers

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Definition of their roles:

- Costco Wholesale: business in the retail industry
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- Customers: The buyers

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 Philippine Christian University
Dasmariñas Campus
Graduate School of Business and Management
Online Education and Professional Advancement

III. SUMMARY OF ISSUES

Main Issues
- limited number of brands that cause discounts on purchases.
- the sale of the articles does not bring much profit compared to their purchase price.
- low staff turnover
- low staff turnover and lack of training.
Supporting Issues
In the commercial market there must be several brands of items. Customers often have the

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preference. So, it is important to make the variety of brands to meet the choices of the latter if not

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they will purchase somewhere else.

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I. TIME CONTEXT

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 Philippine Christian University
Dasmariñas Campus
Graduate School of Business and Management
Online Education and Professional Advancement

- It first location opened in 1976

II. VIEW POINT
Costco Company is the one to solve its problems that it is facing in order to remain the
best and leading retailer.
III. CENTRAL PROBLEM
The key central problem the Costco is struggling is that it only sells a limited number of
brands and therefore they are able to increase sales volume which leads to purchase discounts.
IV. OBJECTIVES

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- To be able to offer deep discounts on high-ticket items

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- To be able add the number of brands

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WANT
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- To be able to expand the diversity of their inventory
- To be able to recruiting
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- To be able to have training cost

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V. AREAS OF CONSIDERATIONS
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The Different factors contributed to the central problems of the company are the following:

- The company is avoided to spend many

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- A limited chose

- lack of constancy in the stockages

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SWOT
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S: The company consistently performs better than competitors and lower prices. Costco has the best
business model in the retail industry and treat employees well and promoting.
Sticking with these simple strategies.
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W: Low employee turnover helps, no recruiting and lack of training expenses cost. Sell a limited
number of brands.
O: add the number of brands to increase purchases and expanding the diversity of their inventory,
offering deep discounts on high-ticket items.

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 Philippine Christian University
Dasmariñas Campus
Graduate School of Business and Management
Online Education and Professional Advancement

T: Consumers build confidence in online shopping.

VI. ALTERNATIVE COURSE OF ACTIONS (ACAS)

Offer deep discounts on high-ticket items
- Advantage: encourage the adhesion of new customers and customer loyalty
- Disadvantage: customers will prefer to buy online
Add the number of brands
- Advantage: increase purchases

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- Disadvantage: less purchases

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To expand the diversity of their inventory for the good the company.

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- Advantage: To give competences to the employees

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- Disadvantage: The employees will keep doing the routine.
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VII. RECOMMENDATION
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Here is the recommendation the company to improve the brands. The Costco company must
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add other brands of their company's products to create diversity of customer choices and attract more
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customers to join because if there is diversity of brands customers will prefer to join. 'Buy and enjoy
the benefits.
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VIII. PLAN OF ACTION

Here is the action plan that Costco company have to follow in order to rise different brands.
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- Make the sondage of brands preferred by the customers

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- Select the more preferable brands.

- Contact different factories
- Establish contracts
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References
https://en.wikipedia.org/wiki/File:Costcoheadquarters.jpg

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 Philippine Christian University
Dasmariñas Campus
Graduate School of Business and Management
Online Education and Professional Advancement

https://drive.google.com/file/d/1f- OkOjPj3F7J_VIEQWowMgXCPsuIkhYy/view?
usp=sharing (Management -global edition 14th)

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