Costco's Five Forces Analysis - Essay Example

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Costco's Five Forces Analysis

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’. ...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.

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