- Costco's low-price strategy is one of their main strengths in the retail industry. They offer bulk items at low costs for customers, which is cheaper than buying them individually for more money.
- Costco comprises an increasingly loyal customer base. This is due to their membership programs that they offer, in which customers gain better prices, rewards and discounts with a membership.
- Costco offers low operational costs and has a good supply chain. They have been expanding their supply chains and have the advantage over suppliers due to their bulk buying and huge presence in the market. This means they use this to their advantage in order to get products for cheaper than their competitors.
- Costco is a well-liked brand compared to top competitors in the industry. This is because they offer a private product selection, membership programs, good treatment of their employees and are ethical outside of the organization.
| - Costco comprises a limited product selection, thus, offering less variety compared to other retail giants. They sell many products that they do have, but the selection itself is pretty limited compared to retail competitors.
- Costco has limited its presence to a few key markets. Costco is very popular in the USA and Canada but is not that popular on a global scale unlike competitors like Walmart.
- Costco is deeply affected by its product and produce recalls, which in turn, causes customers to choose other retailers and wholesalers. This is because Costco sells bulk items, so it affects product selection and profits more.
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| OPPORTUNITIES - Uses several channels to market their products, for example with online stores. Online shopping is the new biggest thing of this generation and is growing tremendously, so Costco should take advantage of their big customer base and create a great E-commerce site.
- Investing in emerging markets like India, China etc. This would benefit Costco because they have most of their locations in North America, so a global presence could be a great way to expand the brand further.
- Expanding their range of product diversity. This is a good opportunity to gain more customers, as their product selection is limited compared to its main competitors.
| THREATS - One threat that Costco will face is the competitive competition of the retail industry. The retail industry is one of the biggest in the world, so this means new companies are emerging and top competitors are improving to be the best everyday.
- Since it is internationally operated, Costco is prone to political problems among countries. The government is putting harder restrictions on some big retail businesses when it comes to policies and supply chains.
- Labour costs in Canada and the USA have been on a steady rise over the years which means it will affect the profits of Costco, so a global expansion might be needed.
- A threat could be the rise of Ecommerce stores which is gaining mainstream popularity, especially during the pandemic. This is taking away business from the big box stores.
- Fluctuating exchange rate can be detrimental to Costco's
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