Need your reccommendations or ideas for the final conclusion or what to recommend to the company attending to what is done in this project, what do you think the forecast would look like for Costco until 2020? I need at least 6 ideas about what the financial future will bring to Costco. Thanks in advance.

this link i think is very interesting and helpful for the conclusionhttps://www.thestreet.com/files/r/ratings/equities/COST_weiss.pdf

COSTCO WHOLESALE, (NASDAQ: COST) STRATEGIC ANALYSIS Costco Wholesale is the largest warehouse club operator in the US. According to the National Retail Federation (NRF), Costco resides as the second largest retailer in the world behind Walmart. In 2015, Costco's sales grew 3.2% compare to 2014 reaching sales of $116.2 billion while its net income increased 15.5% reaching $2.4 billion and member loyalty reach its peak as well. According to NRF, the world's top ten retailers are the following: Warehouse clubs operate on a high-volume sales model offering thin margins and compete on the basis of price. Customers must pay an annual membership fee for the benefit to purchase merchandise in bulk at very competitive prices. This membership model is designed to promote customer loyalty and maintain a revenue stream, which helps the company lower retail prices. Costco is the largest membership warehouse club in the US in terms of sale. Warehouse clubs in the US are dominated by three major chains: Costco, Walmart's Sam's Club, and BJ's Wholesale Club. In 2015, Sams's Club reached sales of $58 billion with 652 locations while Costco's US sales positioned at $84.4 billion with 487 locations. BJ's is a privately held company and the NRF estimates $12 billion of sale in 2015. Rivalry among existing firms The discount warehouse retail industry is highly competitive. The major competitors in the US are Sam's Club (Walmart) and BJ's Wholesale which all of them offer low prices to attract members and provide them with considerable cost savings. This segment is highly concentrated with the two largest players, Sam's and Costco accounting for over 82.2% of the segment revenue in 2015. The growth of club stores and supercenter during the past two decades has had a notable effect on the grocery retailing in the US. This include reduction of small \"mom and pop\" retailers and mergers and acquisitions among large retailers. Economies of scale are important to ensure profit maximization and to achieve a costleadership strategy since margins are very thin and competition is high from other merchandisers like Target, hypermarket chains, and discount retailers. Switching costs are low. It is easy for businesses and individuals to change their memberships from one club to another. The degree of product differentiation is weak. Competitors such as Sam's and BJ's have similarity in the merchandise offerings. However, Costco has been increasing the penetration of its in-store brand, Kirkland Signature which it is a premium brand offered to members at a considerably lower price compared to their national brand equivalent being this a key differentiator and store attractor for Costco. There is a strong competition on a worldwide basis with global, national, and regional wholesalers and retailers, including supermarkets, department and specialty stores, gas stations, and internet retailers. Also regular retailers that don't require membership, including Walmart and Target compete in this industry. Threat of New Entrants The barriers to a new entrant are high. In order to enter in the warehouse club industry considerable capital is required to purchase merchandise, purchase or lease premises, invest in marketing and advertising, and hire and train employees if the new entrant wishes to compete at the same scale. Planning and construction permits might be difficult to obtain for a large-scale retail and also, legal and administrative costs are considerable. Costco and its competitors enjoy significant economies of scale who have more power to obtain lower prices from their suppliers, driving down their costs to bring low prices product to the market. Threat of Substitute Product The threat of Substitutes is strong: o Households and businesses have many other alternatives where they can purchase ranging from supermarkets, specialty stores to internet retailers. o Competitors like discount supermarket chains Aldi and Lidl in the US may also be a threat. They have well-established private label brands as well. o Prices of substitute retailers might not be low; however, the range of merchandise selection is greater and the number of convenient store locations are much greater as well. Bargaining Power of Buyers Individual members of wholesale clubs have little power to bargain with a wholesale club over the prices they will pay or over the terms and conditions of sale. This is due to the competition from other warehouse clubs, supermarkets, supercenters, department stores, discount stores, other specialty retailers, and even neighborhood stores. Also, due to large space and thin margin requirements, the wholesale clubs presence in urban areas is limited leaving a gap in fulfilling consumer requirements in cities. Bargaining Power of Suppliers Suppliers are mainly the manufacturers of the products that warehouse clubs elect to sell. Suppliers include companies like Pepsico, Procter & Gamble, Kraft Heinz, etc. While a big proportion of these manufacturers are large enterprises with good reputation, they are not in any strong bargaining position that allows them to dictate the terms and conditions on which they will supply their products. No single supplier accounts for over 5% of revenue. Wholesale clubs have relatively strong bargaining position with its suppliers. COMPETITIVE STRATEGIC ANALYSIS Costco Wholesale Corporation has been reporting good results in recent quarters, as it is benefiting from strong demand from both U.S. and international customers, recently the strengthening U.S. dollar has tempered international results. Costco profitability is not influenced by the industry structure that they are but mainly by the strategic choices it makes in positioning itself in this industry. The industry basic product is a commodity, whereas, the profit is generally super low and the competition can be high and sever. The company strategy is to offer its members low prices on a limited selection of nationally branded and select private-label products in a wide range of merchandise categories. This will typically produce high sales volumes and rapid inventory turnover. Too, the operating efficiencies achieved by volume purchasing, along with efficient distribution and reduced handling of merchandise in a no-frills warehouse, allows the company to operate profitably at lower gross margins than traditional wholesalers, mass merchandisers, supermarkets, and supercenters. Mazzone & Associates 2015 Retail Report Costco, as we can see, has being using an efficient competitive strategy of Cost leadership. Costco, which is the largest warehouse club operator in the USA, and also others warehouse as Bj's and Walmart Sam's club where able to position themselves high above the others that compete on the same segment. The Key Factors for Costco to success on this segment and maintain their costs leadership are: 1. Ability to control stock on hand. The biggest part if goods and products for this industry are seasonal, with 32.1% of annual sales occurring between October and December. Therefore, Costco stores must have tight stock control measures to ensure that popular items are reordered and sufficient product lines are available to maximize sales. 2. Customer centric work force. Costco focus their workforce on customer service centric where costumer will staff that are friendly, helpful and provide excellent customer service. \"Successful retailers focus on three key things: the customer, the customer and the customer. Logistics, great products and merchandising help drive profitability for retailers, but the customer experience and service, whether in a store or on-line, are critical for any retailer's success.\" -Dom Mazzone, Managing Director of Mazzone & Associates (M&A) specializes in transactions in the Retail Industry 3. Ability to expand and curtail operations rapidly in line with market demand. It need to be able to expand operations during peak periods to meet increased demand (i.e., Christmas trading) but also curtail operations during weaker trading conditions (i.e., economic slowdown). 4. Attractive product presentation. Their stores require an effective layout and design, good shelf management, friendly and helpful service and a clean environment. 5. Strong logistics and distribution backbone. More important for this segment is the core strength of the ability to control margins and costs through efficient and effective logistics and distribution systems between its manufacturers and among its stores to properly manage inventory, among other things. SWOT Analysis: Costco Wholesale Corporation Strengths Pricing Authority: As we stated previously Costco Competitive Strategy is mainly based on the Cost Leadership. The mainly goal for Costco is to provide quality goods at the lower and most competitive price. They are not focusing on maximizing prices in the short term, they focus on having the perception among its members of \"pricing authority\\fI would buy Costco's stock because its fundamentals are extremely good despite the premium cost they are charged. Costco's stock are strong and stable. Costco still maintains modest dividend payouts despite the slowing growth and the operational challenges enunciated earlier. Furthermore, Costco's stock have low price volatility and pays the investors off in the long term. Costco also has a great business model that assures investors value for their money. I would buy Costco's stock because its fundamentals are extremely good despite the premium cost they are charged. Costco's stock are strong and stable. Costco still maintains modest dividend payouts despite the slowing growth and the operational challenges enunciated earlier. Furthermore, Costco's stock have low price volatility and pays the investors off in the long term. Costco also has a great business model that assures investors value for their money