Presented by Angel Fion Neil Pita& Stephen FJU English Dept. Business Commnucation

SWOT Analysis

Introduction

• A membership warehouse club

• Founded in 1983, Seattle

• The fourth biggest general retailer in the United States, after Wal-Mart, The Home Depot, and Kroger.

• 132,000 full- and part-time employees

• 51.8 million members

Locations

• Costco has 543 locations around the world.• 398 in the United States and Puerto Rico • 75 in Canada • 31 in Mexico • 20 in the United Kingdom • 8 in Japan• 6 in South Korea • 2 future locations in Australia • 5 in Taiwan• Kaohsiung(1997)

• Business Philosophy• Product Strategy Fion Wu

• Store Philosophy• Membership Neil Chen

Business Philosophy

Our Operating Philosophy Is Simple• Keep costs down and pass the savings on to

our members. • Our large membership base and tremendous

buying power, • combined with our never-ending quest for

efficiency, • result in the best possible prices for our

members. - Quoted from COSTCO website

Product Strategy• Choose the most popular brand of each

category • Bulks Size Sale• Import New Products• Promotion

賣場的經營管理 Store Philosophy

• 所有商品以原運送棧板的方式進貨並陳列於簡單的賣場環境。 Simple Display

• 提供會員安全整潔的購物空間，走道寬敞、舒適。 Big, Safe, Comfortable Shopping Space

• 商品的處理，有關溫度控制及衛生均有嚴格控管。 Strict Control on Conditions of Products Serving • 儘可能的提供給會員更多的免費服務，例如：免費輪胎

安裝 / 平衡服務，免費視力檢查 / 鏡架調整服務， 免費停車。

Offer as more services as possible to our customers • 賣場採自助式，並使用紙箱而非塑膠袋包裝商品。 You have to help yourself ; Offer paper box and

Reduce unnecessary plastic pack.• 微量的廣告文宣。 Few DMs

Membership

• Membership would compromise COSTCO the operating cost and administrative cost and lower down the products price they offer to the customer, usually lower than the competitors

• You pay for the membership annually. The more you shop here, the more you get.

Strength ＆ Weakness

Angel Chang

Strength

I. Diversified products and services

II. Strong market position

III. Low cost promotion and marketing strategy

Strength

I. Diversified products and services • Various national brand

• Private label Kirkland

• Various services

ex: self-service gasoline stations at a number of US and Canadian locations

Strength

II. Low cost promotion and marketing • the 4th largest retailer in the US

• the 8th largest in the world

• ranked 29th in the Fortune 500 list of America's largest corporations based on sales

Strength

III. Low cost promotion and marketing strategy

• conducting direct mail marketing

• new members follow on from word of mouth advertising

Gold star member card

Weakness

I. Concentration of operations in Californian market

II. Lax quality control

III. Weak compliance function

Weakness

I. Concentration of operations in Californian market

• increasing unemployment levels

• increased prices of food and energy

• declining housing prices

• natural disasters

Weakness

II. Lax quality control

• several product recalls

III. Weak compliance function • failed to properly compensate employees for

overtime work

• improper bonus formula relating to overtime pay

Opportunities ＆ Threats

Pita Chen

Opportunities

• Growing demand for private label products:

Kirkland

Opportunities

• Increasing online sales:

www.costco.com

Opportunities

• Expanding market presence:

Year 2006: opened 25 warehouses

Year 2007: opened 31 warehouses

Year 2008: plans to open 35 warehouses

Threats

• Increasing competition:

Wal-Mart, the largest retailer in the world

Threats• Increasing competition:

low cost operators sell single category or a constricted range of products

Threats

• Lower consumer confidence:

Owing to weakening labor market and harder borrowing standards

A decline in consumer confidence could adversely affect Costco's revenues.

References

• www.datamonitor.com

• www.costco.com.tw

• http://en.wikipedia.org/wiki/Costco_Co.