The article mentioned that their Japanese members prefer Costco over local supermarkets for the following reasons: a variety of goods, in-store promotions and amenities, large packaging, price, the spaciousness of store, and customer services. The Icelandic media was very interested in the arrival of Costco. Copyright © 2003 - 2021 - BusinessTeacher.org is a trading name of All Answers Ltd, a company registered in England and Wales. The company has maintained a clean and strong brand image, which has continued to grow stronger with time due to a consistent focus on quality and customer service. The supplier switching costs are low for this wholesale industry. Since its foundation, the company has strived to create a culture that cares for the happiness of both the customers and the staff. Japanese retailers are relatively more sophisticated with technology and for their knowledge of handling perishable foods (e.g., fish, fruits/vegetables, and meat) when compared to Western retailers. Costco reported positive numbers even in the recession. However, the product quality is outstanding. “Spencer, have you been in a Costco before? The competitors are losing money by holding onto their goods longer. Millennials are now the largest segment of the US population and therefore the most important customer segment for US-based retail brands. By targeting affluent customers, the company is able to generate strong revenue while dealing in a much-limited product range as compared to Walmart. As there are so many similar features of the wholesale club competitors that there is a weak differentiation between them that increases the risk of members switching between and among the wholesale club competitors. The Japanese have a high priority towards freshness, and foreign retailers have not met the Japanese standard, till Costco. However, since the company deals in a limited range of products, it has managed a simpler but lean and agile supply chain. The high inventory turnover reflects positively upon the company as it indicates the company is selling items quickly, and they are not in Costco's possession long as indicated by their days of inventory. The long-term debt-to-equity ratio increased significantly from 19% in 2000 to 45% in 2015, as shown in Table 1. Costco’s merchandising strategy is to buy products in handful from the vendors and that helps drive cost down for members and lets Costco sell in volume (Harris 2007). The products sold at the wholesale clubs are comparable and readily available among each other and at other stores and with a large selection of products to choose from (e.g., supermarkets and convenience stores). The company also generates strong word of mouth by providing its customers with a nice range of good quality products at competitive prices and excellent customer service. Suppliers, even large companies in concentrated industries, do not have strong bargaining power for wholesaler clubs, especially Costco. The retail industry in the United States is marked by heavy competition and it is why the retail brands invest heavily in marketing. The second element is Costco's limited product selection. Instead of investing heavily in marketing as the other retail companies do, Costco strives to maintain a strong reputation in the market, which it has made possible by establishing a culture of customer service, collaboration, and ethics. Granted, Costco seems to have an impenetrable business model in all types of economies, as will be further discussed in question five, but Costco could then be in a stressful financial situation. Costco Corporation is a strong brand, characterized by low prices, efficient warehouse operations, and special approach to choose and handle excellent merchandise. Vault. 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