Costco Situational Case

Situational Analysis

Students complete three assignments that contribute to development of the final marketing plan presentation. Students use the same business throughout the course (unless approved by the instructor). The Situation Analysis for the assigned company is the first component of the marketing plan that students will develop. They will gain an understanding of the chosen business' current situation by reviewing the business’s category, customer, competitors, and the company. The Situation Analysis will use tools such as the PEST and SWOT analysis. Students may request a team for each of the plan assignments but teams are optional. The situation analysis should be no more than 5 pages with supporting spreadsheets and graphs.   The references and paper should be written in APA style.

Situation Analysis: Students will address the 4 Cs of the marketing environment, company, customer, competitors, and climate/category including:

• Socio-cultural factors 

• Technology 

• Economic factors 

• Political-legal factors

 • Location-geography 

• Company culture and objectives 

• Competitors: both direct and indirect

 • Market demographics 

• Market size-how large is the market the company currently targets or plans to target? It is best to be very specific with a market niche citing credible sources. 

• Market scope-what characteristics of the market will be targeted and which target groups will not be targeted. 

• Market readiness-how ready are the customers for the product or the category of products?

Situational Analysis: The Case of Costco Wholesale Corporation.

Costco is a multinational wholesale corporation boasting of 689 warehouses worldwide. Besides in the US where the company was founded in 1983, the company has operations in Japan, Mexico, United Kingdom, Spain, South Korea, Australia and Canada. The company has a unique method of operation; it is a membership warehouse club. Its unique operational aspect has seen the company grow explosively. It was the first company to grow its revenues from zero to 3 billion in sales in less than 6 years (Costco, 2016). This paper will analyze the operating environment of the corporation to understand its current situation. Various models will be applied in the paper and they will include; the SWOT analysis, PEST analysis, and it will also incorporate the 4Cs.

The PEST model is an analysis model that businesses use for the analysis of the macro environment. The P in PEST denotes the Political environment. This is how and to what extent the government intervenes in the economic model of the country (Babatunde & Adebisi, 2008). Costco is a multinational corporation that operates in different countries and in the US, in different states. The different political territories have different rules and regulations, which have different impacts on the business. Different areas of jurisdiction have different pricing and size that are specific to the specific to the warehouse clubs. As such, various specific items face minimum markups, for instance, tobacco and alcoholic products besides gasoline. Another area that elicits political activity geared towards the corporation is environmental regulations. Various political jurisdictions have different rules pertaining to the generation, handling, haulage, storage and disposal of materials deemed to be biohazards. As such, Costco must endeavor to operate in accordance to the respective host country political expectations to ensure that the business lives up to its dream of the going concern.