The goal of this memo is to evaluate Costco’s performance compared to Sam’s Club and BJ’s.

Costco Wholesale Corporation is really a wholesale club that needs customers to get annual memberships in order to look 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 within the competitive wholesale industry. In addition, it adopted a strategy which was different as compared to its major competitor, Sam’s Club This enabled costco reviews to get the largest wholesale club in the industry in 2001.

I. Costco’s Performance with regards to 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 except for year 2000 to 2001. BJ’s on the other hand, had growing revenues until 1999 when their revenues then started to grow in a declining rate.

Costco has a higher membership fee and more and also this enabled Costco’s total revenue to become greater than BJ’s. This membership fee is very important as it is the primary cause of the company’s bottom line since sales excluding membership fees barely covers operating expenses. Costco also offers more warehouses and far higher sales per store. Costco has warehouses in many international locations while BJ’s just have warehouses in the united states. However, Costco features a lower operating and gross margin which shows that BJ’s has more efficient operations and higher product prices than Costco. Costco’s inventory turnover ratio is outstanding because it is much bigger than BJ’s. This clearly implies that Costco has an excellent operating efficiency.

II. Costco’s Performance in terms of Sam’s Club

Sam’s Club, on the other hand, has more members and warehouses when compared with costco customer service number making it Costco’s largest competitor. However, Costco had larger total revenues, sales per store and operating income because of its strategy. This is also because Costco is much more internationally dispersed in comparison to Sam’s Club because it has more warehouses in international locations. I am just struggling 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 unit value of goods and getting few Stock Keeping Units (SKUs) looking at the vendors which enable production savings.

Costco’s core strength is made to provide it with higher total revenues and also to create value to the customers. Their core strength can be separated into two:

• Targeting a wealthier group of small business owners and middle class shoppers which is different from Sam’s Club.

• Refusing to mark up products a lot more than 14 percent within the distributor’s price

Costco’s technique 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 when does costco open is to create value with their customers. They vpaisq definitely obtain many loyal and satisfied customers that do not mind paying a greater membership fee to join Costco. Costco is yet another very ethical company as they are not implementing a technique which serves to lessen their costs and cheat customers of their money in an indirect way.

Costco Corporate Office Contacts – New Facts About This Issue..

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