Costco Essay Example | Topics and Well Written Essays - 500 words

Costco - Essay ExampleAs for pricing, the major strategy of Costco is that their prices should be for sure bring down than those of the competitors. The friendship copes its products at prices 15-20% lower than new(prenominal) retailers or department stores. The philosophy of the organization is that while other companies are trying to transfer at higher prices, Costco should be al courses finding ways to sell even cheaper.The business believes the major advantage of this strategy is that, first of all, in such a way they offer value. Secondly, this allows to make sure there will be no competitors in their niche the beau monde makes its prices so low that nobody else can enter their market. Thirdly, the goal of low prices is not only to sell today, but to be building a brand and a system that will be in the market for years. So, though shareholders in inject might not be as high as that of the rivals, Costco is aiming at long income instead of short-term financial success.The major distribution channels of the company are its warehouses, to which people come and choose products to buy. Another source of sales is their web-site, which allows to buy items that might not be available at the warehouse. Another advantage of the web-site is speeding up the sales process. For example, a customer may upload images into the online photo center and pick the pictures at the local warehouse in about an hour. Selling at warehouses allows to company to save on fancy retail stores, salespeople, space rent fees and other attributes of traditional distribution. In addition, the warehouses works hours are shorter that those of other retailers, thus allowing Costco to save on labor.However, thought the company seems to be pretty successful, it is capable to certain risks related to both the countrys economy and the companys operations flair and strategy. According to Costco, among the greatest risks of the company is strong competition Costco competes with a great num ber of retailers, department