Costco Case Study

Competition Among the

North American Warehouse Clubs:

Costco Wholesale

vs.

Sam’s Club

vs.

BJ’s Wholesale

LaKoya Jones

Provide an overview of the company and/or industry and add any pertinent information relevant to the case (5 points)

1. Do all three warehouse club rivals – Costco, Sam’s, and BJ’s Wholesale – have highly similar strategies? What differences in their strategies are apparent? Does one rival have a better strategy that the others? Does one rival have a somewhat weaker strategy than the other two? (15 points)

The three-warehouse club’s seem to have similar strategies. Sam’s Club and Costco want to be the lowest price provider. They all use cross docking which increases efficiency. They all have low overhead and production cost. They all have high efficiency and high sales volume. BJ’s focus on low cost but they also present some best cost factors. For example BJ’S focus on specialty services, more buying options, larger product assortment, and inner circle focus.

Costco’s strategy is by far the strongest because it is 56% of the market. Sam’s Club tries to mirror Costco which makes them have a weaker strategy.

2. Which of the three warehouse club rivals has been the strongest financial performer in recent years? Complete the following calculations to help support your answer. (30 points)

Costco has been successful by selling their merchandise at a cheaper rate. Costco is loyal to their customers and puts them first. Based on the results Costco is doing better financially than Sam’s Club and BJ’s. Costco has several stores throughout the United States and several worldwide which is by far more than its competition.

| |2009 |2008 |2007 |

|CAGR in total revenues, FYs 2005-2009 for Costco and 2006-2010 for |7.8% |4.1% |6.5%...