“Hit’em where they ain’t”

David Sampson

Aaron Swanson

Pearl Sotelohttp://youtube.com/results?search_query=costco+comedy

The history of Costco Wholesale

1983 first Costco was opened in Seattle

Price Club 1976 Merged in 1993 as PriceCostco Became Costco in 1997

The history of Costco Wholesale

First Company to ever grow from zero to 3 Billion in sales in less then 6 years

Worldwide company with over 50 Billion in sales in recent years

Philosophy, keep costs down and pass the savings on to our members

Retailing

Presentation Bare Bones

Concrete floors, shipping pallets, & orange steel Wide isles for forklift operation Continuous product moves Costco.com

Products Higher quality or larger quantity than competition

Avoid carrying same items as discount retailers Continuous rotation of inventory

Seasonal & roadshows About 4000 SKU

Members Only

Pricing Less than 14% margin on everything Annual membership fee $50

Executive membership $100 Promotion

Minimalist approach to advertising Coupons, magazine mailed to members Rebates

Location

NW based company in Issaquah WA 509 worldwide locations

375 USA 9 regions (NW, NC, BA, LA, SD, NE, SE, MW, TX)

71 Canada (Eastern & Western) 30 Mexico 19 UK 5 Korea 5 Japan 4 Taiwan

Oregon Trail

12 warehouses in Oregon Primarily located along I-5 Near other retailers

Albany Aloha Bend Clackamas Eugene Hillsboro (Extended Warehouse) Medford Portland Salem Tigard Warrenton Wilsonville

SWOT Analysis

Strengths – to build on Value- Prices & Products- “sell high quality, nationally branded and

selective private label merchandise at low prices” Service strategy- Gas, pharmacies, 1-hour photos,

bakery, optical dispensing centers, copy centers… Customer Service Differentiation- “hit’em where they ain’t”

focused on small business owners “Treasure Hunt”- constantly moving products

around. Limited assortment of merchandise- allows

Costco to achieve high sales volume and rapid turnover

SWOT Analysis

Weaknesses- to cover No marketing/advertising No large brand variety- Limited number of SKUs Finding help in store Long lines, checking receipts NEW return policy- as of February 2007

Low profit on GAS in Oregon- because must pay employees to pump gas

SWOT Analysis

Opportunities- to capture Continued growth- locally and internationally

Potomac Hills, VA May 2007 Tustin, CA - June Kawasaki, Japan – July West Valley, UT – AugustGreenville, SC – August NE San Jose, CA – AugustToledo, OH – AugustGrafton, WI – AugustSelma, TX - September

Online shopping “Costco Home”

SWOT Analysis

Threats- to defend against Competition- for members, employees, warehouse sites,

products and services with local and national retailers. Economic Factors- Higher interest rates, higher energy

costs, inflation, levels of unemployment, and consumer debt levels

Resources

www.costco.comwww.wikipedia.com