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Product cover image for Costco Wholesale Co.: Internationalizing Business Model

Costco Wholesale Co.: Internationalizing Business Model

Lucas Liang Wang, Shuang Hu, Xiaru Li, Yujie Guo, Mike Challes, Qing Dai

Product #:W44277
Supplier:Ivey
Discipline:International Business, Strategy
Setting:China, 2024
Details:Case (PDF) • 17 pages • 2025-09-17

Subjects:

Business modelsInternationalizationBusiness managementInternational businessStrategy

Industries:

Goods, trade, and consumer services

Geography:

ChinaAsia
Your Price:$9.71

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Whether to adapt its business model to fit the local market or to educate the local market to embrace its existing business model—this was the question confronting Costco Wholesale Corporation (Costco) in China in May 2024. The world-leading warehouse wholesaler had entered China through an online store in 2014 and then branched offline in 2019. By May 2024, it had built seven locations across major cities. However, Costco’s unique business model was encountering fundamental incongruences with the local market dynamics, and the tension had become increasingly acute, spanning membership requirements, bulk purchases, global sourcing, and online–offline integration. This tension could no longer be left unaddressed if Costco were to avoid failing in one of the world’s largest consumer markets.

Learning Objectives

This case is written to teach undergraduate, master of business administration (MBA), and executive master of business administration (EMBA) courses on topics involving business models, retailing formats (both online and offline), and foreign market expansion. Given the national setting, this case is particularly suitable for discussing the challenges and solutions for Western multinational enterprises in an emerging East Asian market. The following specific courses and topics are suggested:
  • Strategic Management (business model concept and innovation)
  • International Business (internationalization of business model, digital entry, global integration/local responsiveness framework, emerging market strategies)
  • International Marketing (distribution expansion in a foreign host country, retailing formats, offline and online channel integration)
By working through the case and assignment questions, students will have the opportunity to do the following:
  • Acquire a comprehensive knowledge of business models (concept, propositions, and operational aspects), including understanding how business models contribute to competitive advantage (resource-based view) and assessing the fit between business models and context, especially in a cross-border setting through a global integration/local responsiveness framework.
  • Compare the digital mode with the traditional mode for entering an international market.
  • Contrast the traditional retailing model with the digital retailing model.
  • Practise decision-making in aligning the business model with the host country context.
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Case Study: Costco Wholesale Co.: Internationalizing Business Model (English version) | Ivey Publishing