Costco External Analysis

6988 words 28 pages
Strategic Case Analysis:
COSTCO
(Nasdaq: COST)
Strategic Management
MGT4340 Table of Contents

1.0.0. Executive Summary…………………………………………………
2.0.0. Company History…………………………………………………….
2.1.0. Background…………………………………………………….
2.2.0. Purpose of this study ………………………………………….
3.0.0. External Analysis ………………………………………………….
3.1.0. General Environmental Analysis ………………………….
3.1.1. Demographic Segment ……………………………….
3.1.2. Economic Segment …………………………………
3.1.3. Political/Legal Segment ……………………………
3.1.4. Socio-Cultural Segment …………………………..
3.1.5. Technological Segment………………………………
3.1.6. Global Segment ………………………………………
3.1.7. Summary of General Environment Analysis………….
3.1.8. Driving Forces ……………………………………….
3.2.0. Industry Analysis
…show more content…
Since 1984 Costco has had to increase the size of their shopping carts four times. Their customers spend an average of $95 a visit, a rate that has been steady over the years. But with some savvy stocking practices, including being the first membership warehouse to offer an expanding fresh-food section (featuring a bakery, refrigerated produce area, fresh meats, and seafood), people are visiting Costco more often. In 1995 customers visited an average of once every three weeks, but by 1999, they were returning every ten days. With more and more frequently returning customers, as well as the company's constant expansion into new markets with warehouses opening every year, Costco saw its sales earnings grow by a rate of 6 percent a year from 1995 to 2000. Costco has three membership levels, ranging in price from $35 to $100 a year (in the U.S.): Business, Gold Star (individual), and Executive. Any business or store with a retail sales license is qualified for a Business membership ($45 a year), allowing these customers to shop for resale or business use. Business members (numbering 4.1 million in 2000) can also buy goods for private use, and the membership includes a spouse card. The member also has the option of buying up to six additional membership cards ($35 each) for associates or partners in the business (with a transferable company card being another option). Gold Card memberships ($45 annual fee) are available to individuals

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