Costco Corporate Office Contacts – Bear This In Mind..

The purpose of this memo is to analyze Costco’s overall performance compared to Sam’s Club and BJ’s.

Costco Wholesale Corporation is really a wholesale club that needs customers to buy annual memberships in order to purchase 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. It also adopted a technique that was different in comparison with its major competitor, Sam’s Club This enabled costco contact to be the greatest wholesale club in the industry in 2001.

I. Costco’s Performance in terms of BJ’s

Once I compared Costco’s total revenues with BJ’s total revenues in Exhibit 5 of FIN 197 Seminar in Finance case book, I discovered that Costco’s total revenue were increasing in an increasing rate with the exception of year 2000 to 2001. BJ’s on the other hand, had growing revenues until 1999 when their revenues then began to grow at a declining rate.

Costco has a higher membership fee and much more and this enabled Costco’s total revenue to be more than BJ’s. This membership fee is vital because it is the main contributor to the company’s bottom line since sales excluding membership fees barely covers operating expenses. Costco also has more warehouses and much higher sales per store. Costco has warehouses in lots of international locations while BJ’s just have warehouses in america. However, Costco has a lower operating and gross margin which demonstrates that BJ’s has more effective operations and higher product prices than Costco. Costco’s inventory turnover ratio is outstanding because it is much bigger than BJ’s. This clearly shows that Costco posseses an excellent operating efficiency.

II. Costco’s Performance with regards to Sam’s Club

Sam’s Club, on the other hand, has more members and warehouses as compared to costco customer service number that makes it Costco’s largest competitor. However, Costco had larger total revenues, sales per store and operating income due to its strategy. This is because Costco is more internationally dispersed when compared with Sam’s Club since it has more warehouses in international locations. I am not able to compare Costco’s financial statement performance with Sam’s Club because Sam’s Club information is joined with Walmart.

III. Costco’s core strength and strategy

Costco pursues the technique of concentrating on lowering the device cost of goods and getting 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 also to create value to the customers. Their core strength can be divided into two:

• Targeting a wealthier selection of small businesses proprietors and middle-class shoppers which differs from Sam’s Club.

• Refusing to mark up products more than 14 percent over the distributor’s price

Costco’s strategy is really efficient in providing it with a competitive advantage over its competitors BJ’s and Sam’s Club. This is surely a long-term value enhancing strategy because costco hours today is always 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 with Costco. Costco is another very ethical company because they are not implementing a technique which serves to reduce their costs and cheat customers with their money in an indirect way.

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