Key Issues of the Case
The Key Issues to be observed in this case include a look at why Costco has grown to be the discount retail warehousing sales leader and the strategic actions they have taken to achieve this market Position. First, the study will involve an analysis of the industry’s driving forces and the key success factors in the industry in order to obtain an understanding of the discount retail warehousing industry. The study will then perform a SWOT analysis of Costco and its environment with the objective of identifying the opportunities and threats faced by Costco and the strengths it has to help them seize and overcome them. This will allow for an analysis of the company’s strategy for continued growth in the future.
Driving Forces for Costco
Costco Wholesale Corporation is the number one warehouse club store in the world. Warehouse clubs compete with a wide range of other types of retailers which include Wal-Mart Dollar General, supermarkets, general merchandise chains, specialty chains, gasoline stations and internet retailers. Their competition varies because of the many different products they sell.
Costco’s industry conditions change because important forces drive industry participants to alter their actions. The driving forces in an industry are the major underlying causes changing industry and competitive conditions. They have the biggest influence on how the industry landscape will be altered. The main driving forces for Costco include, but are not limited to entering the internet market, changes in the industry’s long-term growth rate, changes in who buys the product and how they use it, product innovation, marketing innovation, and changes in cost.
Entering the Internet Market
Costco is beginning to have a g ...