Analysis of Costco’s Business Model and Its Entry to Chinese Market

Jiawen Song

doi:10.54097/7zewhp21

Authors

Jiawen Song

DOI:

https://doi.org/10.54097/7zewhp21

Keywords:

Warehouse Club Model, Market Entry Strategy, Retail Internationalization, Localized Operation

Abstract

This paper examines Costco's strategic practices in entering the Chinese market against the backdrop of globalization. Using the SWOT model, the analysis highlights its robust financial strength, unique membership-based culture, and employee relations advantages, while also pointing out its over-reliance on the North American market. In the Chinese market, its value-for-money positioning has successfully attracted rationality-conscious younger consumers, though it must contend with intense competition from rivals such as Sam’s Club. Furthermore, through the PLOC management functions framework, the paper elaborates on how Costco adapts and executes its core business model locally via planning, organizing, leading, and controlling. The study concludes that, despite facing complex localization challenges, Costco holds promising prospects in the Chinese market, owing to its strong membership system and precise middle-class positioning.

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