There is a high threat of substitutes from discount retailers and other low-cost retailers. The intensity of rivalry is moderate. With only three firms in the industry there is an inherent rivalry between the major players. However, strong growth in the market has reduced the intensity of the rivalry somewhat. There are some corporate stakes between Costco and Wal-Mart/Sam's Club. Overall, the industry is an unfavorable one for new entrants but for an established player like Costco it is moderately favorable, save for the rapid growth that would otherwise make it favorable.
Alternative Strategies
Costco could continue to expand via growth. There are definitely opportunities in international growth and there may be opportunities as well in domestic organic growth. Another alternative strategy is the status quo. Costco is in an excellent position -- market dominance, financial health, strong performance. There is no need to change. A third option is to retrench but there is no evidence to support that strategy. A fourth option is a combination of other strategies -- for example pursue international expansion while adopting the status quo domestically.
Recommended Strategy
The first phase of the recommended...
Costco Internal Assessment Part 1 Qualitative Analysis Brief Company Overview Having commenced its operations in 1976 with the establishment of the very first retail warehouse club in San Diego by a warehouse club retailing pioneer by the name Sol Price, Costco has grown to become one of the largest retailers in the world. The company’s first location mainly served small enterprises and was located in a modified/adapted plane hangar (Costco, 2019). The name of
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