Scribd Logo
Upload

Welcome to Scribd!

  • Costco Companies, Inc

    Uploaded by

    Dheeraj Agarwal
    94 views11 pages
    Costco is a warehouse club store that focuses on selling products at low prices in high volumes. It markets to large families and businesses. Costco keeps prices low by eliminating extras like bags and packing materials, requiring customers to bring their own or use vendor boxes. This saves on costs. Costco turns over inventory rapidly through volume purchasing and efficient distribution. It operates on a low-margin, high volume business model with a limited product selection. As of 2009, Costco had 566 stores internationally, generating over $71 billion in annual turnover.

    Original Description:

    Copyright

    © Attribution Non-Commercial (BY-NC)

    Available Formats

    PPTX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    Costco is a warehouse club store that focuses on selling products at low prices in high volumes. It markets to large families and businesses. Costco keeps prices low by eliminating extras like bags and packing materials, requiring customers to bring their own or use vendor boxes. This saves on costs. Costco turns over inventory rapidly through volume purchasing and efficient distribution. It operates on a low-margin, high volume business model with a limited product selection. As of 2009, Costco had 566 stores internationally, generating over $71 billion in annual turnover.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
    94 views11 pages

    Costco Companies, Inc

    Uploaded by

    Dheeraj Agarwal
    Costco is a warehouse club store that focuses on selling products at low prices in high volumes. It markets to large families and businesses. Costco keeps prices low by eliminating extras like bags and packing materials, requiring customers to bring their own or use vendor boxes. This saves on costs. Costco turns over inventory rapidly through volume purchasing and efficient distribution. It operates on a low-margin, high volume business model with a limited product selection. As of 2009, Costco had 566 stores internationally, generating over $71 billion in annual turnover.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
    of 11

    Costco

    By:
    Ankita Mandhata
    Ashish Pandey
    Manoj Pandey
    Md. Saad Beg
    Suchita De
    Sudeshna Sarkar
    Format: Warehouse Stores
    • Focuses on selling products at low prices,
    often at very high volume

    • Marketed primarily to large families and


    businesses

    • Lower prices and better values by virtually


    eliminating all the frills and costs
    associated with wholesalers and retailers

    • Saves money by not stocking extra bags or


    packing materials; to carry out their goods,
    customers must bring their own bags or use Typical Costco warehouse interior
    the merchandise shipping boxes from the
    company's outside vendors
    Business Model
    Low prices Volume purchasing
    Limited selection of quality merchandise Efficient distribution
    + Wide range of merchandise categories Reduced handling of merchandise
    Rapid inventory turnover + No-frills, self-service warehouse
    Operating efficiencies

    Rapid inventory turnover


    + Operating efficiencies
    Profit at a very low gross margin
    Merchandise Category
    Turnover
    Year Turnover (in US million $)

    2009 71,422

    2008 72,483

    2007 64,400

    2006 60,151
    Number of Stores (566)
    Country No. of Year of
    Stores entry
    U.S. (40 413 1983
    states) and
    Puerto Rico
    Canada 77 1985
    Mexico 32 1992
    U.K. 21 1993
    Korea 7 1994
    Taiwan 6 1997
    Japan 9 1999 The Costco outlet at Docklands, Victoria
    Australia 1 2009 This is Australia's first Costco outlet

    Source: Costco Wholesale Annual Report 2009


    Competing in Foreign Markets
    • Think global, act local
    ▫ Same basic strategy
     Low price
    ▫ Tailor product offerings by
     Cultural difference
     Local managers decide
    Revenue Break Up Percentage for 2008

    21

    US
    Others

    79

    Source: Warehouse Club Industry Guide 2009


    Important Points
    • Till 2009, Costco was the third largest retailer in
    the U.S. and 9th largest in the world
    • A typical Costco location generates an average
    annual sale of $137 million
    • Costco location generated sales of $976 per
    square foot
    • Average store size is 1,42,000 square feet
    • Total no. of cardholders:55million (2009)

    Source: Warehouse Club Industry Guide 2009

    You might also like