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Costco Canada: Case Study By Student Name Course Institution Date Economic Perspective Costco is a retail business in which retail goods are offered on a discount warehouse membership basis. Costco’s largest and long-running competitor is Sam’s Club, a similar business model owned and operated by Wal-Mart…
al., 2008, p. C-3). While this business model has been entirely successful thus far, the provision of limited choices can be problematic in the long-term. With globalization consumers are increasingly confronted with a variety of choices. Therefore shopping in an environment with limited choices may go against what modern consumers have come to expect and prefer. Costco’s business model has nevertheless been successful so far. For example in 2006, total sales in Costco’s 496 stores worldwide amounted to US$ 59 billion. Membership included 26 million private members and 5.2 million business members which amounted to US$1.2 billion in fees for Costco membership. Each of Costco’s stores realize sales each year at an average of US$128 million while its closest competitor Sam’s Club realizes only US$67 million annually (Thompson, et. al., 2008). However, since Costco and Sam’s Club are based on the same business model, the disparity in sales might be a matter of concern. Costco can expect that at some stage Sam’s Club will attempt to take some of Costco’s market shares and the sales’ positions can be reversed. ...
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