Published by MBA Skool Team, Last Updated: August 25, 2021
SWOT analysis of Costco analyses the brand by its strengths, weaknesses, opportunities & threats. In Costco SWOT Analysis, the strengths and weaknesses are the internal factors whereas opportunities and threats are the external factors.
SWOT Analysis is a proven management framework which enables a brand like Costco to benchmark its business & performance as compared to the competitors. Costco is one of the leading brands in the lifestyle and retail sector.
The article below lists the Costco SWOT, competitors and includes its target market, segmentation, positioning & USP. Let us start the Costco SWOT Analysis:
For Costco, SWOT analysis can help the brand focus on building upon its strengths and opportunities while addressing its weaknesses as well as threats to improve its market position.
The strengths of Costco looks at the key aspects of its business which gives it competitive advantage in the market. Some important factors in a brand's strengths include its financial position, experienced workforce, product uniqueness & intangible assets like brand value. Below are the Strengths in the SWOT Analysis of Costco :
1. Costco present in nearly 800 locations
2. Costco is one of the largest membership based warehouse club model retail chain which makes it unique among the big retail chains
3. Costco Wholesale have more than 200,000 employees
4. The company has a strong financial position and good revenue performance overall as compared to its competitors and is ranked very high in Fortune 500 list
5. The Costco brand has high popularity and good repeat customer loyalty
6. One of Largest retailer of beverages in the world
7. Costco Business Centers carry restaurant, hospitality, janitorial, convenience store, and professional office supplies
8. Most Costco locations have a food court
9. Apart from US, the brand is present Canada, UK, Mexico, Japan etc. strengthening its global presence and brand
10. Costco has a strong brand legacy dating back to 1980s and has since been among the preferred retail chains in US
11. Costco was one of the first few to get into online sales and it still has strong online presence which helped it during the pandemic
12. The company also offers multiple other services like the auto program, insurance etc. to the customers
The weaknesses of a brand are certain aspects of its business which are it can improve to increase its position further. Certain weaknesses can be defined as attributes which the company is lacking or in which the competitors are better. Here are the weaknesses in the Costco SWOT Analysis:
1. Though Costco is present in may international locations, primary are US and Canada in terms of number of stores
2. Stiff competition means market share performance is stagnant
3. Transportation and shipment costs are high for Costco as compared to competitors especially online ones.
4. Thought unique, the warehouse model is not adopted well by lot of customers
The opportunities for any brand can include areas of improvement to increase its business. A brand's opportunities can lie in geographic expansion, product improvements, better communication etc. Following are the opportunities in Costco SWOT Analysis:
1. Tapping the international market specially emerging economies
2. Acquisition of smaller retail chains can help Costco grow globally
3. More visibility through advertising and customer focused services
The threats for any business can be factors which can negatively impact its business. Some factors like increased competitor activity, changing government policies, alternate products or services etc. can be threats. The threats in the SWOT Analysis of Costco are as mentioned:
1. Increasing competition from retailers and ecommerce portals can affect the business of Costco
2. Government policies and taxation can affect the margins
3. Increase labor wages and demand, and brand switching can be a threat
There are several brands in the market which are competing for the same set of customers. Below are the top 13 competitors of Costco:
Costco is a low priced discount store offering a wide product variety
Customers wanting to purchase daily need consumer goods
Target Corporation Group
Middle and upper class households
Costco Wholesale is one of the top largest retailers in the world
This article has been researched & authored by the Content & Research Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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