03.

Competitive capabilities
Membership

 Costco restricts sales through this membership system,

which gives consumers a sense of belonging and own-
ership, resulting in higher sales.

 This membership system also has the effect of increas-

ing economics by focusing on the middle class and be-
yond, excluding lower consumers.
03. Competitive capabilities
Private Brand(PB) Strategy

 Costco makes and sells products under its own brand which is ‘Kirkland Signature’.
It was born in 1996 and is Costco's self-developed product brand.
 Under the Kirkland Signature, they sell almost everything they need at home, including sweets,
drinks, bottled water, coffee, pizza, household goods, feed, luggage, electronics, clothing, nuts,
and detergents. 30% of total sales come from Kirkland Signature Brands.
03. Competitive capabilities
15% Margin Strategy

 It means a company always leaves 15% margin.

 The more you sell, the lower the price. It can't be
compared with some department stores that have
a 30% or 50% distribution margin.
 Selling a lot at an affordable price makes a lot of
money.
03. Competitive capabilities
The way of Cost Reduction
Choice & Concentration
 Only a small number of carefully selected prod-
ucts that are expected to be good sales and
merchandise display and sales.
 By quickly exhausting inventory, inventory costs
can be reduced and management costs can be
reduced.
1Card per 1Country policy
 This strategy aims to lower merchant commis-
sions paid to credit card companies.
 Visa card only available in the US and In Korea,
Hyundai Card can only be used from Septem-
ber this year.
 Due to the one-card principle, the rate is ex-
tremely low, with a commission rate of up to
2.5%-> 0.7%.
03. Competitive capabilities
Refund Policy

 Unconditional Refund
 Regardless of whether the product is defective or not, you can always get a 100% refund.
 There is no limit to the refund period, except for computers, cameras, tablets, and laptops, which
have a 90-day deadline.