III. SWOT ANAYLSIS
Strengths WeaknessesManagementMajority of top management officialsare “home grown”Only 6% of Costco employees leaveafter the first year, compared to 44% of Wal-Mart’s
Simple layout may detract fromluxury items offered in store
MarketingIncrease in comparable store sales 2004-2005 (8%) and 2005-2006(7%)“Treasure Hunt” aspect makes shoppingfun againCostco’s philosophy is to keep overheadcosts low and pass those savings on tocustomer’s in the form of low prices.
Costco does little to no formaladvertising except in the instance of a store opening, so they may not bereaching their full membership potential.
Accounting /FinanceCostco turns over its inventory nearlyonce a month, which is more frequentthat its competitor BJ’sCostco has consistent Return on Salesand Return on Assets.
BJ’s has a stronger Asset Turnover than Costco.Costco’s gross profit margin hasdeclined from 2004-2006, whileBJ’s has increased.
Production &OperationsCostco operates stores in the US,Canada, Mexico, UK, Japan, SouthKorea, and TaiwanBecause of Costco’s high inventoryturnover we generally have theopportunity to sell and be paid for inventory before we are required to paymany of our merchandise vendorsSection B-4Costco has not yet opened stores inall regions of the globeSection B-4InformationSystemsCostco has a separate website for storesin each of its international reasons.Costco offers special online deals eachweek dubbed “This Week’s TreasureHunt”Costco only offers an online retailoutlet to customers in Canada andthe US.Costco’s homepage is overwhelmingdue to the conglomeration of