Costco Wholesale Club Strategic Plan Essay

Words: 6619
Pages: 27
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Evan Wabrick
Strategic Plan
Dr. Watts
4/18/2012
Strategic Plan for Costco Wholesale Corporation
Executive Summary
The retail industry is an extremely competitive environment that poses many challenges for Costco Wholesale Corporation and its competitors. Since many of the stores offer the same products, it may sometimes be very hard for customers to differentiate between retail stores. Even though the economy is recovering from a recession, the retail business is still a mature industry and is improving very steadily. Costco and its competitors are affected by the same political, economic, social, and technological factors, such as taxes, presidential elections, SEC regulations, the economic state of the country, exchange rates, …show more content…
Costco would lobby for the candidate that would help their business the most, whether it is tax breaks, credits, deregulation of business, etc. In the 2008 presidential election, Costco CEO James Sinegal supported Barack Obama with campaign contributions, which seemed a surprise since most Fortune 500 companies support republican candidates (retailindustry.about.com). SEC regulations are a final political factor. Costco is a publicly traded company; hence, is subject to stricter rules and regulations set up by the Sarbanes-Oxley Act of 2002. Stricter rules and regulations mean more time and costs needed to abide by this rule, which are cumbersome to all firms and ultimately lowers profit. Since the housing market crash that started in December of 2007, more people are now returning to shop at retail stores, which is improving the retail sector’s recovery. (Farfan) In a distressed economy, consumers are more cautious about how they spend their money, which is expected to continue due to underemployment and high unemployment rates. Firms in this industry need to continue to offer their member customers a broad selection of a variety of products at a low cost. This will attract more customers as well as maintain customer loyalty. Even though the economy is recovering, gas prices are rising. This could have a negative consequence for Costco since it operates gas stations at numerous stores throughout the country. Some
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