Costco Executive Summary

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History The company opened its first location in 1976 under the name of “Price Club”, and was in a converted airplane hangar on Morena Boulevard in San Diego. In the beginning, they concentrated on small businesses, though they quickly discovered that they could achieve far greater buying power by serving a select market of non-business members. This proved to be a wonderful strategy as the idea of warehouse stores caught fire and began to show great dividends. In 1983, Costco opened its first warehouse in Seattle, WA. Costco became the first company ever to grow from zero to $3 billion in sales in less than six years. When Costco and Price Club merged in 1993, the combined company, operating under the name Price Costco, had 206 locations generating $16 billion in annual sales. The operating philosophy was simple. Keep costs down and pass the savings on to our members. The large membership base and tremendous buying power, combined with the never-ending quest for efficiency, resulted in the best possible prices for its members. In 1997, the Costco was officially adopted; this organization has grown in a worldwide business having total sales well exceeding $64 billion.…show more content…
By keeping the prices well below 6%, they have provided the members with deep discounts. They offer one of the larges and exclusive product category selections to be found under one roof, however, they only offer 4,000 products as opposed to the 150,000 that Wal-Mart stock. The strategy is to get people in and out without much fuss. The CEO commented that there is no need to offer more than one or two brand names. Costco offers a broad spectrum of products ranging from groceries to media, to appliances. They are known for carrying top quality national and regional brands, with 100% satisfaction
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