Case Study Analysis Costco

Case study analysis Costco

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
PESTLE Analysis........................................................................................................................4
Porter Five Force.........................................................................................................................7
SWOT Analysis...........................................................................................................................9
CONCLUSION..............................................................................................................................13

INTRODUCTION
Business environment is considered as one of most important aspect of an organization.
Business environment is considered as sum or collection of all internal and external factors that
can affect the business or decision making of an organization(Hamilton and Webster, 2018). This
processes can be used by the business organization to get better overview of the market place in
order to make proper policies and changes in the organization to improve the performance of
organization in market place. This report is providing business environment analysis of Costco
Wholesale. Costco Wholesale is an American global corporation which is operating in chain of
membership only clubs of warehouses. It is considered as third largest retailer organization after
Walmart. Company was established in year 1976 in San Diego, California as Price Club. Later in
sept 1983 it was established as Costco Wholesale in Seattle, Washington. Organization was
founded by James Sinegal and Jeffrey Brotman. Currently company is operating on 785 locations
around the world. mainly the operations area of organization considered as- Unites States,
Canada, United Kingdom, Australia, Mexico, Japan, China, Taiwan, Spain, France, South Korea
and Iceland. Various internal, external and competitive factors for the organization will be
analysed in order to know their impact on the performance of organization in market place. For
external analysis porter analysis will be used in the report. For the internal factor analysis SWOT
analysis will be used to analyse the internal capabilities of the company in market place.
Competitive analysis for the organization also will be conducted in order to perform porter five
force will be used in study.
MAIN BODY
To analyse the market place considered for organization can use different tool and
techniques in order to collect information and data related to business environment in market. In
the analysis of business environment process this is important to perform macro and micro factor
analysis to design effective policies and decisions for the business of organization. For the
External factor analysis or macro factor analysis organization can us PESTEL analysis. PESTEL
analysis is known as acronym of six different external factors which are extracted from the
external factors that are important for the organization. Main external factors that are categorised
to develop better understanding about these factors. Categories of external factors are- Political
Factors, Economical Factors, Social Factors, Technological Factors, environmental factors and

legal factors. These factor can be considered by the organization to make effective changes in
organizational polices and processes as per the impact of external factors.
PESTLE Analysis
Political Factors
Political factors are considered as factors that are related to the decisions that are taken by
the government in order to keep the actions of the organization limited in order to maintain
political and economic stability in country. There are various decisions and policies of the
organization are need to be considered by the company to make effective changes in market
place to get better result with their business operations in market place.As per the decisions of
the organization for the business organization there are different opportunities Costco Wholesale
have to grow their business in market place(Prajogo, 2016). Policies that are implemented by the
government are supporting the Costco to grow their business in market place. The business
policies that are designed by the government are positive for the organization to run their
operations in market place with higher effectiveness. The foreign policies that are effective for
the business or goods transaction in market place. Organization can take advantage of the
government policies in order to perform global business expansion. Costco can take the
advantage of the government policies in order to grow their business in national and international
market.
Economic Factors
This is most important for the business organization to consider the economical factor in
order to maintain economic stability in the organization to make the business profit stable and
suitable to ensure the profitability of the Costco in market place. Mainly these factors are
associated with the stability of the nation’s economy. It has major impact on the performance of
the business organization in market place. Better economic condition in country can provide
more opportunities to the organization to improve their marginal profit in market place. Effective
economic conditions can help the organization to make international trade agreements. In
developing market, Costco can make proper efforts in order to gain proper benefits of market
place. The economic conditions in market place can encourage the organization to generate
higher profit in market place. The economic stability is country is also good for organization and
it can help the Costco to maintain effective performance in market place. Some challenges can be