Costco Corporation Business Analysis

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evnm212

Business Finance

Description

In researching and preparing your paper, you should use a minimum of 5 sources of information. Develop a reference list of your sources and appropriately reference them throughout the paper as you present information from them.

Situation Analysis

1. Describe the current climate and situation that your retailer finds itself in as it attempts to compete. Describe what is occurring in the industry. Provide a brief overview of the retail sector in which the retailer operates. What environmental and economic factors are affecting the retailer? Describe competitive pressures, changing demographics and buying preferences, consumer behavior issues, image issues, etc. that affects this retailer and how they conduct business? How has the industry changed as a result of ecommerce and technology?

2. How has your retailer changed and evolved over time? What is your retailer’s primary business? What is their business model (how do they choose to operate)? What is their corporate strategy? What are their goals? What parts of their business are growing and generate the most revenue? How is your retailer seeking to increase revenue in the future? 

3. Corporate Analysis – Who is the parent company of your retailer? What retailers are part of their portfolio? What is the parent company’s overall market strategy and how does this retailer fit into their overall strategy?

4. Competition 

Who are the retailers’ competitors (both direct and indirect)? How does your retailer compare to these competitors in terms of its size, market dominance/share, sales, profitability, etc.? 

What is your retailer’s competitive strength? How do they try to compete? Are there strategies that have not worked for them?

What retailers have they identified as competitive threats? Why?

Marketing Strategy

5. Retail Market Strategy 

a. Target Audience – Who is their target audience? (describe demographically and psychographically, if possible) How does this compare to the competition?

b. What image do they want to convey? How do they attempt to position themselves in the minds of consumers in the market? What is their current image in the industry and in the minds of consumers? Is this image working for them? How does this compare with the image of competitors?

c. How do they make use of technology (web and ecommerce, supply chain management, information systems, etc.)? How has technology affected the way they conduct business?

d. What is their global presence and strategy? What countries have they entered? How successful have they been expanding into these countries? What obstacles have they faced?

e. What is their location strategy? Why have they chosen this strategy? 

f. What is their approach to managing human resources? (if this info is available)

g. Describe their merchandising strategy – how they buy, what they buy, breadth vs depth of merchandise, etc. How is it reflected in their financial strategy?

h. What is their pricing strategy and how does this affect their profitability? 

i. Describe their approach to advertising and sales promotions. Has it been effective for them?

j. What challenges does your retailer face in terms of the retail strategy variables just described? Do some appear to be working better than others? 

Financial Analysis

6. Conduct a financial analysis of your retailer and two to five of its top competitors. Include revenue growth, Gross Margin, Net Margin,Inventory Turnover, projected sales etc. What does this analysis say about how your retailer operates and its profitability? What can your retailer do to improve its profitability?

This should be atleast 5 pages in length( just words). All tables and numbers should be in the appendix. Also compare to 3 other competitors and use 3 financial years (recent at least upto 2018)

Please follow the guidelines and write it like you are answering the questions but in a paper form. Everything in the guidelines needs to be included and labeled.

User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Explanation & Answer

I will add appendices shortly.

Running head: COSTCO CORPORATION

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Costco Corporation
Author’s Name
Institutional Affiliation
Date

COSTCO CORPORATION

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1. Current climate and situation

Costco cooperation retailer finds itself in a situation of limited growth due to stiff
competition from other retail companies. The retailer is operating among other famous retail
companies that include Walmart, Amazon and Sam's Club. This makes the competitive climate
to be very stiff and limit the market share and growth of the retail shop (Pantano, 2015).The
retail industry has proper distribution channels that enable it to effectively transfer the products
to the consumers. The free entry into the market has encouraged several brands to enter the
industry and sell their products directly to the consumers. This has created stiff competition in
the market. The industry has a lot of opportunities and profits. The competitive pressures of
Costco operations are mainly from other giant retail operations. Despite Costco having a popular
brand name, it has pressures to maintain its competitive advantage due to the increasing number
of new entries into the industry (Berman, 2015).
The environmental factors affecting the retailer include changes in climatic condition
making the organizations change its strategies of operations including the type of energy used to
transport its products to consumers. The economic factors affecting the cooperation include
interest rates and inflation that may affect the spending of the citizens. When interests rates and
inflation rates are high, individuals will spend less due to increased prices of goods and failure to
borrow loans from banks. As a result, the sales of the retailer reduce. Changing demographics are
other environmental factors in that as population changes; the consumption rates also change
(Damron, Rupp and Smith, 2016). Increased population has led to increased levels of
consumption requiring the individuals to purchase more products from the retail shops. As
population changes, a new generation comes up with different tastes and preferences that affect
the operations of the business.

COSTCO CORPORATION

3

The industry has embraced new technology and e-commerce. This has made the
operations to be more effective, convenient, efficient and time-saving. With stiff competition in
the industry, most retail businesses have come up with innovative ideas to obtain the greatest
market share in the industry. For instance, the use of membership-only model enables the
retailers to have multiple data of every cus...


Anonymous
Really useful study material!

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