Costo Case Study

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    25-May-2015

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  • 1. Case StudyFadi Abubaker Jessica Dietrich Sonia GalvezKatie JenningsChristina Walthour

2. Agenda Company Overview Key Issues Alternatives Recommendations ConclusionSonia 3. Company Overview Founded in 1979 by James Senegal Largest U.S membership warehouse club 54M Costco cardholders 550+ clubs 40 states 9 countries Multi-channel retailer #9 on TWICEs Top 100 Retailer Over $90B in global sales estimated in 2012Sonia 4. Key IssuesMarket Profit Retail format Saturation Margins Members-only Similar to other 2% thin-profit marginwarehouse business:warehouse dealers Leverage sales Highly competitive Smaller format Constraints RegionalU.S. expansion mall locations Sonia 5. Product MixFadi 6. Market PositionFadi 7. Life CycleFadi 8. Costco On Track?Fadi 9. Financial HighlightsFadi 10. Financial Highlights (cont)Fadi 11. StrengthsWeaknesses Channel leader Older locationsInternal Affluent customer base Low household penetration Multi-channel offer Low profit margins (