The Strengths and Weaknesses of Costco's Business and Financial Model as well as the Potential Risk of Costco's International Development and Outlook

Abstract

People are inseparable from buying necessities in their daily life; however, they may not pay much attention to the products they purchase, such as the strategy that the product company uses and the business risk the company might face. Therefore, the study focuses on one of the American sizable company-Costco, to analyze the necessities people purchase from Costco and the advantages and disadvantages of Costco's operation and financial model, as well as its risk and future expectation. A series of online research, Data research, directional comparison, and chart method combined with the calculation of average price, net income, etc., indicate that Costco has an excellent operating effect in the market and has become the second-largest retailer in the United States due to its unique membership system and management model. In addition, Costco also extensively develops international trade to expand its influence and sales force. However, Costco still has some potential risks. For instance, Costco will face different risks for its international business under diversified cultural backgrounds. This study focuses on the risks and suggestions of Costco's development in China. Finally, combined with the development of science and technology, it puts forward Costco's automation measures and the idea of developing e-commerce and looks forward to the future of Costco.