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Costco Essay

1960 words - 8 pages

Impact of Environmental Factors on Marketing Decisions of Costco Wholesale Corporation

Environmental factors consist of all the factors and activities which have a considerable impact on the running of the business. Environmental factors have a powerful impact on the normal functioning of the any business, especially in the marketing decisions (Pagell & Halperin, 2000). These factors pose challenges and threats to the success of any business. In order to deal with such environmental factors a firm should enhance its core competencies and make sound strategies (Staff, 2009). There are various factors which would have deep impact on these new services offered by the firm. The firm ...view middle of the document...

2009). These factors are essential to evaluate the marketing mix strategies of the company at the global level. These factors usually cannot be controlled by the businessmen and therefore, a careful analysis of the environment is essential to discover the problems and find their possible solutions.

The economic condition of Costco Wholesale Corporation mainly remains consistent, as the growth rate of the sales of the company is consistent. This is because; on the yearly basis, the growth of the warehouses of the company is moderate and the growth of the membership of the company also runs on the proper track (Taking Stock in Costco Wholesale Corp. (COST), 2008).

The economic factors on which the performance of Costco is based are the systems of tax payment, investment and allowances, sophistication of moving and raising capital, prices of the commodities, fiscal and monetary policies and rates of exchange, etc. (Staff, 2009).

Trade practices and agreements occupy an important place whenever we talk about international business or international operations. Moving of goods and services across borders needs to be controlled through some practices or agreements. Hence, they need to be followed for peaceful operations (Pagell & Halperin, 2000). Costco has been successfully operating overseas by adhering to the various trade practices. Through this, it has been able to improve its customer relations, effectively evaluate and manage the risks, improve its reputation and avoid legal proceeding cost (Chidrawar, Hatch & Kramer. 2009).

Demographic environment segment is the most important segment of the general environmental analysis of the company. The important demographic bases for demographic segmentation are age structure, gender, income distribution, family size, occupation, education, social class, religion, race, nationality, etc. (Staff, 2009).

In international operations, the problem of diversity arises and this is because in every country, there are people of different nations and languages. Doing business at a global level requires a careful analysis and study of the population of those countries where the business has to perform its operations (Hirji, 1999). Costco Wholesale Corporation's population size is very large. The company has its locations in all the major countries of the world with large population mass. The countries, in which the company operates has millions of people who demand for the company's products in bulk. Thus, due to its expanded business in the most populous countries, the company has large volume of sales (Pagell & Halperin, 2000).

Costco Wholesale Corporation is running its business in both developing and developed countries. The population growth rate of both the developed and developing countries is quite increasing, which provide an opportunity to the company to expand its product line, as well as, its sales volume (Staff, 2009). The income level of families of both developed...

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