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"Costco" Five Forces Analysis Summary - Essay Example
Pages 4 (1004 words)
“Costco" Five Forces Analysis Summary 1.0 Introduction Costco Wholesale Corporation (CWC) 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…
Costco Wholesale Corporation receives bulk purchase based enquiries 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 (Costco.co.uk, n.d.). 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 (George et. al., 2004, pp. 8). In the study, the five forces analysis of the company has been evaluated in order to determine its competitive advantage within the market. 2.0 Porter’s Five Forces Analysis Porter Five Forces analysis facilitates to establish the strength of competition, profitability as well as 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’ (Racklies, 2001). Competitive Rivalry between Existing Players Costco Wholesale Corporation (CWC) primarily competes in the extremely fractionalized as well as competitive retail market along with the wholesale market. ...
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