StudentShare solutions
Triangle menu

Costco's Five Forces Analysis - Essay Example

Nobody downloaded yet
The focus in this paper is on Costco Wholesale Corporation (CWC) that operates a series of ‘cash & carry membership warehouses’ that trade high-quality, domestically branded as well as privately labeled merchandises at a low price range. It sells the products to businesses that purchase for the purpose of commercial use and also to the individuals as selected member groups. The business of the company is depended on the attainment of high sales volume along with inventory turnover by providing various ranges of products at low price. Costco Wholesale Corporation receives bulk purchase based inquiries from domestic as well as international markets in large volumes. Costco Wholesale Corporation possesses widespread worldwide buying power and it endeavors to satisfy any specific item related requirements beyond its everyday assortment. The innovative concept regarding warehouse retail has enabled the Costco Wholesale Corporation (CWC) to make vertical integration and provide the products from manufacturers towards consumers. Porter Five Forces analysis facilitates to establish the strength of competition, profitability as well as the attractiveness of a company in the marketplace where it is operating. The five competitive forces that generate the framework of market and industry are ‘bargaining power of supplier’, ‘bargaining power of customers’, ‘threats of new entrants’, ‘threat of substitutes’ and ‘competitive rivalry between existing players’....
The other significant issue is the extreme focus related to capital, as type of inventories as well as warehouse facilities make it difficult for a firm to exist. Another noteworthy issue is that the retailers of warehouse strive to maintain brand loyalty and this effort is unique in comparison to usual customer loyalty based campaigns. In this aspect, Costco has captured the lead by means of proliferation related to tangible products as well as services (George et. al., 2004, pp. 8). Threat of New Entrants The threat of new entrants is low as there is high obstruction of entry in the market due to intense competition of Costco and its competitors. The new entrants may face enormous cost due to the inbuilt capital strength of the company. Costco already has developed good affiliation with suppliers as well as customers thus it would be a challenge for a new company to operate in the new market. Therefore, for Costco new entries are not a matter of great concern. The new entry may be important for two reasons: if the existing store in the market launches a product with greater expediency and low cost and if the competitors such as Target or Wal-Mart introduce warehouse retail chain with their capital resources. However, such situations have not occurred, as a result, for Costco the threat of new entrants has not become a major issue (George et. al., 2004, pp. 8). Threat of Substitute Products The threat of substitute of new products is considered to be low because the substitute of Costco’s multi product offerings is not available in the market. There is presence of substitutes of the products of Costco when there is disaggregation of the products across sub-industry parts. The mattress ...Show more


In the study, the five forces analysis of the company has been evaluated in order to determine its competitive advantage within the market.  Through the analysis of Porter’s five forces, the competitive advantage of the company has been determined…
Author : donnakilback
Costcos Five Forces Analysis
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Costco's Five Forces Analysis"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

(industry FIVE FORCES analysis chapter) in my dissertation
Furthermore, this particular industry analysis framework make managers easily track down the presence of potential rivalry within a given industry, potential threats of new entrants or new businesses that wish to enter the chemical manufacturing industry aside from identifying threats for product substitution.
4 pages (1000 words) Essay
Porter's Five Forces Model
Majority of modern organizations are currently using Porter’s five forces theory to determine their competitive power in the market. I am currently working in hospitality industry and my organization has intentions to diversify its activities to banking sector.
5 pages (1250 words) Essay
The five forces analysis for Morrisons

According to the study conducted Threats of new entrants are potentially high in the UK retailing sector. Development process of superstores is lengthy and requires heavy capital investments. Also, Tesco, ASDA, Sainsbury’s and Morrisons make up 80% of the retail market in the U.K giving them the benefits of an oligopoly.

3 pages (750 words) Essay
Porter's Five Forces Analysis on a Business Case (See attached)
In light of this, Porter’s five forces has analysed the market in relation to the alternative beverages to establish their consumption rate as compared to those of carbonated drinks and their market position up until 2015. Porter’s Five Forces Porter’s Five Forces is an analysis that was initiated by Michael Porter as a means in which companies, and businesses would be in a position to assess and analyse their strength and position in a given market (Hill and Jones 12).
4 pages (1000 words) Essay
PESTEL and Porter Five Forces Analysis for the Metro Bank
The relationship between the political forces in the United Kingdom and the banking industry is subject to change. With that in mind, it must be understood that past experience with regards to the banking industry cannot and should not be determined to be equivalent to future expectations of how the industry will evolve and continue to be manifested.
4 pages (1000 words) Essay
Porter's Five Forces Analises
This strategic analysis tool helps an organization to develop strategy according to the competitive business environment within the industry. Specifically, organizations determine the competitive factors within the industry that enhance their strategy development process (Ahlstrom and Bruton, 2009, p.131).
4 pages (1000 words) Essay
Porter's five forces analysis for UK's venture capital industry
This paper analyses the venture capital industry in the UK using the five force model. Venture capital firms are firms that use share holders funds to invest in other profitable ventures. (CFC (2009)) The UK venture capital industry is one of the
4 pages (1000 words) Essay
Porter's five forces model
nchmarks such as potential entrants, supplier power, industry rivalry, buyer power and threats from substitute products for determining the strengths and weaknesses of an organization. Majority of modern organizations are currently using Porter’s five forces theory to
5 pages (1250 words) Essay
Porters five forces analysis - Beats by Dre
This kind of software was facilitated by the new technology, which really boosted its output and adoption in the world. The company also established a service where people could subscribe to their streaming music from all corners of the world as long as they had internet
8 pages (2000 words) Essay
Five Forces Model
Industries require raw materials, human resources, components and other supplies. This therefore leads to buyer –supplier relationships between the Industry and the producers of the raw materials. When the
1 pages (250 words) Essay
Comments (0)
Click to create a comment
Let us find you another Essay on topic Costco's Five Forces Analysis for FREE!
Contact us:
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
Join us:
Contact Us