Costco: The Leader's Challenges



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Code : COM0031

Year :
2004

Industry : Retailing

Region : US

Teaching Note:Not Available

Structured Assignment :Not Available

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Abstract: Since its inception in 1983, Costco has been the leader in the warehouse club category of retailing. It has been growing steadily under the leadership of CEO James Sinegal. According to analysts some of Costco's policies like running no frills stores and selling a limited range of products contributed to its growth.

However, its leadership is being challenged by Sam's Club, Wal-Mart's own warehouse club. Costco's average annual sales per store are greater than that of Sam's Club. But Sam's has more stores worldwide.

A rejuvenated management team under CEO Kevin Turner is cutting costs and improving the performance of Sam's stores. As a division of Wal-Mart, it is expected to get merchandise at cheaper prices than Costco. Already weakened by price wars, Costco faces a formidable competitor in Sam's Club.

Pedagogical Objectives:

  • To discuss the challenges faced by Costco when competing against Sam’s Club, who is part of a corporate giant, Wal-Mart.

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    Keywords : Costco; Competition from Sam's Club; James Sinegal; Warehouse clubs; Sol Price; Managing in Troubled Times Case Study : Jeffrey Brotman; Kirkland Signature; Discount retailing; Small business buyers; Bill Dreher; No frills stores

    Contents :
    » All Thanks to Sol Price
    » Costco's Steady Growth
    » Sinegal - the Driving Force Behind Costco


    Case Introduction >>


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