One of the top 2 retail stores in the U.S.A is Wal-Mart and Costco. Our chosen company in this report is Costco and the report will evaluate the overall financial performance of Costco and will evaluate how the company’s value chain activities have gone from strength to strength. Costco is one of the largest sellers of retail products within the USA and operate on a similar scale when compare to Wal-Mart. We will thus analyze how Costco has gained competitive advantage and disadvantage due to its business operations. The report will also analyze the financial performance of Costco and Wal-Mart and will evaluate the position of both the companies. By using financial analysis ratios, we can evaluate various aspects of the business operations of Costco as well as Wal-Mart and can thus evaluate if Costco has any competitive advantage or disadvantage over Wal-Mart.
Value Chain Analysis of Costco
The core purpose for value chain analysis is to assess and analyze the strategic significance of value chain analysis for Costco Wholesale Corporation. In conducting a value chain analysis for a wholesale company like Costco, the ideal strategy is in disaggregating a company’s business structure into various divisional business and operational activities. This helps in identifying strengths and weaknesses of a company when compared to its business rivals. Value chain analysis helps in identifying business opportunities for a company. Apart from that, value chain can help in establishing relative impact of business activity which identifies business link and reduction is cost.
Value chain of Costco is comprised of operations, outbound logistics, marketing and sales, inbound logistics and service and support.
Value chain helps in examining relation and link between business activities related to Costco’s growth in the long-term. The aim of a business is in identifying core competencies and in reducing negative impact which is imposed on the operational activities of a business within its value system.