costco technique any industry s success thesis

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Growth Strategy, Reading Tactics, Success, Macro Environment

Research from Thesis:

The company’s suppliers are probably the most important facets of the microenvironment of any company, and Costco makes the same. The company’s suppliers can create a number of negative circumstances if they do not deliver the items in time. This creates a string of grievances that the company cannot solve. Also, an excellent relationship between company and its suppliers for the long-term can bring a series of rewards for the corporation.

Another important principle that Costco used when ever developing their general strategy is represented by the business shareholders and the reward. Particular theories support that the investors are the most important part of the company and that the provider’s objectives should be oriented toward increasing the earnings for these investors.

Costco Budget

The technique was extremely successful for Costco, given the more sales that followed. The company’s product sales evolution within the last five years was the following: $31, 621 in 2150, $37, 993 in 2002, $47, 146 in 2004, $51, 862 in 2006, and $58, 963 5 years ago.

Other examples that prove this strategy was right for Costco are symbolized by the record sales authorized by the business, like: 96, 000 karats of gemstones in 2006, 1 . 5 million TVs, three hundred million worth of cameras, 28 , 000, 000 rotisserie birds, 40% with the Tuscan olive oil in the U. S., $3 billion really worth of gas, and others.

As one may observe, the company is at full expansion and advancement process. Costco’s financial situation is usually following a great ascending craze. And all those inside spite from the low prices utilized by Costco. The outstanding financial numbers reported by Costco were obtained due to the large number of customers buying at Costco.

In addition to the affordable prices practiced simply by Costco, the company is also aiming to attract clients by providing an incredibly wide range of products and services. In other words, the customers should be able to get in the Costco stores all the items and brands they need, so they really will not search them in competitors’ retailers. Also, the items that may not be found in some of Costco’s retailers can be found on-line, on the provider’s website that also provides assistance intended for the company’s buyers.

Costco General Strategy

The elements that support the implementation of Costco’s basic strategy incorporate:


Item selection

Treasure-hunt merchandising

Marketing and advertising

Growth approach

Web site revenue

As mentioned above, one of the key elements of Costco’s basic strategy is usually representing simply by low prices. More, the prices in Costco stores are so low that some of the company’s competition cannot contend in the areas in which Costco activates. This tactic will allow the organization to attract an important number of faithful customers. A sizable and continuous number of customers means significant income coming from sales. This permits Costco to stay implementing a minimal price-based strategy.

Another important aspect is symbolized by the item selection process and its results. As i have said in the case research, the technique regarding the goods range is incredibly interesting regarding Costco. Large supermarkets present ranges of goods between forty, 000 and 150, 500 items. Yet Costco chose to commercialize simply 4, 1000 items. However the selected items are high quality specialist items. Quite simply, Costco removed low quality products.


The case study gives the general approach behind Costco’s success, the main element elements on what it was depending on, and the effects of this strategy. The company’s strategy was very simple in the beginning, as the strategy was based on providing a range of quality products and services in low prices.

As i have said in the case study, the approach proved to be very successful to get Costco. You’re able to send financial performance makes proof of this. Costco has reported a series of record sales for several types of things, detailed in case study.

Reference List

Thompson, Arthur (2009). Costco Wholesale Company: Mission, Business structure, and Approach. The School of The state of alabama. Retrieved February 27, 2009.

Annual Record (2008). Costco. Retrieved March 27, 2009 at

Malone, Thomas (2006). Do Some Business Designs Perform Greater than Others? MIT Sloan Institution of Managing. Retrieved March 27, 2009 at

Prasad, Sixth is v. (2009). Summary of Business Strategy. Social Scientific research Research Network. Retrieved Feb 27, 2009 at

Gans, Joshua (2005). Operationalizing Value-Based Organization Strategy. Melbourne Business College, University of Melbourne. Gathered February 28

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