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Industry Overview• Annual Revenue 462 Billion
• 2009-14 Growth: 3.5%
• 2014-19 Growth Projection: 2.1%• Costco/Wal-Mart: account
for over 82% of market share
Industry Performance•Key External Drivers• Per Capita Disposable
Income• Corporate Profit• Time spent on Leisure &
Sports• Product Offerings
• Kirkland Brand
Industry Performance, Cont’d
Key External Drivers (Cont’d)
• Competition• World Price of Crude Oil• Costco Gas
• Time spent on Leisure & Sports
Costco-Company Overview• 451 Warehouses• 67 Million Members• Inventory: 3,600 items/store• 2014: 79 Billion in Revenue (6.9% Increase)
Strengths• Pricing Authority• Consistently provide
competitive price• Gasoline • Lower cost, brings members
to warehouses• Brand Loyalty• High quality products• Market share growth• Increased customer base
Weaknesses• Geographic Dependence• U.S. & Canada: 87% of total
Sales in 2014• California: 32% of U.S. sales
• Older Customer Base• Baby Boomers• Growing older, spending less
Opportunities• Attract Younger Customers• 19-34 Demographic• E-Commerce• Google Express & InstaCart• Higher quality apparel• Organic foods
Threats• Competition• Highly Competitive• Sam’s• BJ’s
• Non-Member Retailers•Wal-Mart• Target
• Internet Retail• Amazon
Company Analysis• Business Strategy• Lower In-Store Inventory• Focus on Higher End Goods• Slow Expansion
• Historical Value• Stock Price (as of 4/24/15:
$148.12• 1 year growth: 32.52%• 5 year growth: 146.04%