Sample Essay on SWOT Analysis of Costco

SWOT Analysis of Costco

SWOT analysis of Costco is among the best methods used by the company in evaluating itself and making decisions for sustainability in the market. Costco Wholesale is considered one of the largest retailers in the world today. Based in Seattle, Washington, Costco operates membership warehouses in the United States, Canada, Japan, Mexico, Spain and Australia. Besides, it also has several subsidiaries in Korea and Taiwan.

What is SWOT Analysis of Costco?

SWOT analysis of Costco refers to the evaluation of the strengths, weaknesses, opportunities and threats of the company. Considering the majority of players and shifting trends in the retail warehousing industry, it is always advisable that a company conducts a SWOT analysis in order to determine areas of weakness that require fixing and potentialities that should be fully exploited.

By conducting a SWOT analysis, Costco Wholesale will be able to know how to package itself for continuous growth and development in the market. Below is a comprehensive SWOT analysis of Costco.


These are the outstanding features of Costco that makes it unique and different from other retailers in the sector. One of the strengths of Costco is its pricing authority. The company mainly focusses on offering its customers quality products at the most competitive prices. The fact that it does not emphasize on maximizing profits in the short term gives many customers the confidence of always obtaining high quality products.

Brand loyalty is another strength of the company, which it has been able to attain through its constant pursuit of high quality and great value. This has enabled it to attract customer loyalty too.

Costco often records high sales volumes, which contributes to increased revenues. As a result of this, the company is able to make high revenues even if its prices are than other retailers.


Although Costco is a renowned profitable retailer, it still suffers certain defects that if not solved on time, might negatively impact operations. One of them is the company’s business model which allows only the members of the club to use the warehouses. As much as this may encourage customers to buy at the company’s stores, it also limitsImage 2 the number since non-club members might not feel welcome.

Another weakness of Costco is that the stores do not offer a wide variety of goods and services like other retailers. This tends to send away many customers who will opt to shop from stores where they can easily find all the products they need at once.


One of the opportunities that Costco can exploit is the increasing number of younger customers. The recent months have seen the company’s management take measures aimed at attracting young customers, a move that can significantly help in driving long-term sales to the company.

The going numbers of people using e-commerce is yet another opportunity that Costco should look into tapping. Intensive online marketing could also be a great way of venturing into new markets and attracting more customers.

Costco has plans to continue growing its reach on the international map. There several foreign markets with better prospects like China, France among others.


The warehouse services industry is one which is quite competitive, considering the high number of players involved offering similar process, quality and selection. In the domestic market, Costco is facing stiff competition from companies like BJ’s Wholesale Club, Sam’s Club among others. Internationally, there are several other competitors like internet retailers and even others that do not require membership.

The intensive marketing by other retailers dealing in similar products as Costco is yet another threat that the company needs to challenge in order to avoid being edged out.

Conclusion on SWOT Analysis of Costco

Costco Wholesale is a business with high viability, the reason it has continued to expand even poor economic times.  Its competitive prices is a key strength that has kept the business afloat for long. The above SWOT analysis of Costco also reveals that the company has several opportunities it can exploit in order to tame the threats in the market. Through the firm’s website, intensive internet marketing and network of suppliers, it can effectively reach out to a wider customer base and scare away competitors.

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