You are on page 1of 3

Running Head: Defining Access To Foreign Market

Defining Access to Foreign Markets Arian Tyler BUS 100 September 8, 2013

Tyler 1

Running Head: Defining Access To Foreign Market

What do you call a place that services your needs for food, clothing, electronics, home supplies, and just about everything else you can think of that youd ever need? How about Costco Wholesales? Founded in 1976, under the name Price Club, Costco Wholesales has grown and continued to be a staple in the american society and home since its initial year, steadily to this day garnering totals sales in recent fiscal years exceeding $64 billion. Costco Wholesale Corporation, according to Professor Saleh of Virginia Community Colleges, is the largest membership warehouse chain in the United States. Also, as of July 2009, Costco was the third largest retailer in the United State and ninth largest in the world. (Saleh, 2012) Costcos main competition in the wholesale market and membership warehouses are Sams Club and BJs wholesale club. According to CNN Money, Costco Wholesale has placed their headquarters for the company in Issaquah, Washington, United States. One reason for this allocation being in the United States could more than likely be attributed to the fact the company was started in the U.S.A, and more specifically founded in San Diego, California; and, the first warehouse was founded in Seattle, Washington, five minutes away from the current corporate headquarters. Costco is a big deal in the United States. I know this personally, being a child of a Costco employee of 27 years, Costco has continued to aid the workforce and offer equal oppurtunity jobs to the community. T.V. shows and movies aline mention Costco and its immense inventory and variety of selection. With over 500 stores in the U.S. alone, one is bound to run into a Costco at some point in time, but what about if you go to another country? Will you be able to see one there? The answer to that question is yes. You can find Costco warehouses on nine countries. Those nine countries are as follows: Australia, Canada, Japan, Korea, Mexico, Puerto Rico, Taiwan, United Kingdom, and the United states. I believe these locations are favorable because

Tyler 2

Running Head: Defining Access To Foreign Market

amongst the name mentioned are some of the most populated countries. It would be highly plausible to say that there isnt money to be made in these countries. Costco has dealt with sociocultural differences which are differences in a different languages, attitudes and values. Costco is currently doing business in several Asian countries which drastically differs from the culture of America. Costco is also doing business in Mexico and Taiwan, and has had to adapt and tailor its business language and available food court food options among other things to the host state. In considering the strategies for reaching a global market, Costco uses quite a few that Business class has covered and some that are interesting and favorable in the current standard economy. To cover the ones learned in class, Costco uses the strategies franchising, licensing (kirkland, their signature brand), and contract manufacturing. Costco doesnt use foreign outsourcing, which that means Costco does not contract with foreign suppliers to produce products; also, Costco does export its products, and the Costco website details the minimum order requirements for a Costco order to be placed for export. Costco does not allow expansion through franchising. (Saleh, 2011) According to Jim Sinegal, Costcos founder, Costco has remained on top of its game during the fiscal cliff and recession the United States faces due to one unusual business Strategy. (Lutz, 2013) Sinegal, says that simple strategy is one that may not seem so unorthodox to average people; he simply invests in employees and limits the items he sells. (Lutz, 2013)

Tyler 3