Swot Analysis Costco
Business risk 1: Company's sales significantly dependent on its in-store sales. Level- High. Source- Technology
Description: Costco generate its sales revenue mainly rely on the store sales. Online sales only account for about 4% of Costco's in its annual revenue. While U.S.’s online sales are growing faster than store sales, the trend of shopping online for giant packages of everything has increased with times, and will get more and more popular in the future. In this context, two of Costco’s big competitors, Walmart and Target are beefing up their investment into the field of e-commerce to follow this trend. Also, old e-commerce player like Amazon.com Inc., and new players like Jet.com and Boxed.com are currently making inroads with consumers …show more content…
Audit Impact: Research of client’s activities indicates that management is considering the improvement in its online merchandise, such as adding more high-end brands to the website and speeding delivery in distribution centers. Costco should master them more efficiently to maintain competitive. Audit impacts include attention to assertions for occurrence, cutoff and valuation in sales revenues, existence and cutoff in inventory, and consideration of fraud risk to financial statements coming from the management’s pressure to remain competitiveness and gain market share.
Business risk 2: President Donald Trump is intended to propose border tariffs on imported goods. Level- Moderate. Source- …show more content…
In order to maintain membership loyalty and remain competitive, Costco must able to utilize cost leadership through low prices. While Costco follows this strategy, the proposed boarder tariffs would inevitably affect its cost structure to maintain systematically lower prices on those imported products. Though around three-fourth of its operating income comes from annual membership fee, the tariffs would still make an adverse impact to Costco since it needs to sacrifice some of its sales margin to absorb the increase or pass the increased fees onto the customers, which put additional pressure on its sales and
Description: Costco generate its sales revenue mainly rely on the store sales. Online sales only account for about 4% of Costco's in its annual revenue. While U.S.’s online sales are growing faster than store sales, the trend of shopping online for giant packages of everything has increased with times, and will get more and more popular in the future. In this context, two of Costco’s big competitors, Walmart and Target are beefing up their investment into the field of e-commerce to follow this trend. Also, old e-commerce player like Amazon.com Inc., and new players like Jet.com and Boxed.com are currently making inroads with consumers …show more content…
Audit Impact: Research of client’s activities indicates that management is considering the improvement in its online merchandise, such as adding more high-end brands to the website and speeding delivery in distribution centers. Costco should master them more efficiently to maintain competitive. Audit impacts include attention to assertions for occurrence, cutoff and valuation in sales revenues, existence and cutoff in inventory, and consideration of fraud risk to financial statements coming from the management’s pressure to remain competitiveness and gain market share.
Business risk 2: President Donald Trump is intended to propose border tariffs on imported goods. Level- Moderate. Source- …show more content…
In order to maintain membership loyalty and remain competitive, Costco must able to utilize cost leadership through low prices. While Costco follows this strategy, the proposed boarder tariffs would inevitably affect its cost structure to maintain systematically lower prices on those imported products. Though around three-fourth of its operating income comes from annual membership fee, the tariffs would still make an adverse impact to Costco since it needs to sacrifice some of its sales margin to absorb the increase or pass the increased fees onto the customers, which put additional pressure on its sales and