Costco Case Study Analysis
Summary
Costco’s Wholesale Corporation financial statement analysis provided many details of the operations of Costco and its competitors. Margarita Torres, an investor in Costco, added the corporation to her portfolio in 1997. She now finds it time to reanalyze the company to gain insight on whether her investment in Costco is still worth holding onto or if it is time to sell. To study Costco’s performance, three areas were reviewed.
First, was an industry overview of the retail players looking at the different retail types of stores. Included were department stores, discount stores, wholesale clubs, and online retailers. It talked about when each came about and its impacts to the retail industry. Department stores were first to transform the retail industry in the late 1800s. They created the new pastime of window-shopping as well as revolutionizing retailing by offering a variety of products in one location and being known for great customer service. In the 1960s discount stores arose. These were the first retailers to differentiate themselves by concentrating less on the shopping experience and focusing on delivering lowest cost items. Wholesale clubs came along in the early 1980s. These stores were similar to discounters in their pursuit to offer the lowest price for goods, but they went about it in a different way. These clubs offered memberships, large quantities, bulk items, limited selections, and basic stores to be able to offer the lowest prices possible. The most recent retailer segment to enter the market was online retailers. Online retailers were thought to be the next big thing and take over the retail industry; however, it has shown that not as many customers have been transitioning as previously projected.
Second, was a look at the industry growth for retail. The findings came to the conclusion that the sales for the retail industry, as a whole, grew similarly to GDP. Retail industry is a mature industry with companies achieving growth
Costco’s Wholesale Corporation financial statement analysis provided many details of the operations of Costco and its competitors. Margarita Torres, an investor in Costco, added the corporation to her portfolio in 1997. She now finds it time to reanalyze the company to gain insight on whether her investment in Costco is still worth holding onto or if it is time to sell. To study Costco’s performance, three areas were reviewed.
First, was an industry overview of the retail players looking at the different retail types of stores. Included were department stores, discount stores, wholesale clubs, and online retailers. It talked about when each came about and its impacts to the retail industry. Department stores were first to transform the retail industry in the late 1800s. They created the new pastime of window-shopping as well as revolutionizing retailing by offering a variety of products in one location and being known for great customer service. In the 1960s discount stores arose. These were the first retailers to differentiate themselves by concentrating less on the shopping experience and focusing on delivering lowest cost items. Wholesale clubs came along in the early 1980s. These stores were similar to discounters in their pursuit to offer the lowest price for goods, but they went about it in a different way. These clubs offered memberships, large quantities, bulk items, limited selections, and basic stores to be able to offer the lowest prices possible. The most recent retailer segment to enter the market was online retailers. Online retailers were thought to be the next big thing and take over the retail industry; however, it has shown that not as many customers have been transitioning as previously projected.
Second, was a look at the industry growth for retail. The findings came to the conclusion that the sales for the retail industry, as a whole, grew similarly to GDP. Retail industry is a mature industry with companies achieving growth