The history of Taiwan hypermarket industry began with the entering of Makro in1989. The same year, the French company Carrefour established a joint-venture with President Group in Taiwan. Besides Carrefour and Makro, companies that joined the market include local brands Geant and RT-MART and international brands like Costco and Tesco. After years of fast booming in the early stage of development, the entire industry has faced stagnancy for years. Why the industry suffered a downturn can be explained from the following aspects: investors are not optimistic about the overall macroeconomic conditions, consumer confidence is too weak, the competition within the Taiwan hypermarket industry is intense, and the strategic groups of all the participants in the markets are similar. All the reasons combined caused some company have no choice but leave the market or change their strategy. Macro left Taiwan market and Tesco Taiwan are included in Carrefour Taiwan. However, not every company in this industry suffered, Costco¡¦s sales increased when the industry top leaders, Carrefour and RT-MART, faced decreasing sales last year. The purpose of the study is to understand how Costco satisfies customer demand through its unique way in the competitive Taiwan hypermarket industry, how Costco makes consumers accept its way of doing business and how this unique business model differs from competitors in terms of operation, profit earning by analyzing the external industry competition, consumer demand that Costco faces and Costco¡¦s internal operation model. Besides internal and external analysis, the author designs a questionnaire that focus on Costco¡¦s customers¡¦ feelings about it.

Although Costco operates over 580 warehouse stores throughout North America, their location strategy remains relatively unexamined in the economic geography literature. A cursory examination of Costco’s network makes it clear that the firm chooses to locate primarily in the suburbs of major cities, where income levels are somewhat higher than the national average. However, what is not clear is the extent to which other demographic and geographic factors adequately account for Costco’s store locations, and what strategy underlies the geography of the firm’s warehouse stores, especially in relation to its distribution network. This research studies Costco in order to decode the location strategies that have guided the company’s North American and international expansions. The investigation attempts to identify key elements of Costco’s multinational retail network, including this network’s evolution over time. This paper seeks to benefit both retail business and public policymakers by highlighting elements of Costco’s location strategy that have contributed to the firm’s success.

In December of 2010, Costco v. Omega came down from the Supreme Court. The Switzerland-based watchmaker Omega sold Seamaster Collection watches, which were affixed with its copyrighted logo, in the United States as well as in foreign markets. Omega priced watches in the United States market higher than elsewhere. Costco obtained Omega’s watches from a third party that had purchased the watches abroad, then sold them at its membership warehouses for cheaper prices than authorized Omega dealers in the United States. Consequently, Omega sued Costco for copyright infringement. Costco pursued a defense based on the first sale doctrine in response. While from a legal perspective the case was a copyright dispute, this categorization does not make sense from an economic view. Rather, the application of economic models reveals that the core issue in Costco centers about price discrimination, not copyright. This thesis uses a law and economics framework to analyze the facts of and the decision in Costco to determine whether the outcome was welfare maximizing and to assess the implications that the case will have on copyright law in the future.

This research focuses on the global expansion of the transnational retail industry. Globalization is a phenomenon experienced by many industries in the present global economy. The global production network (GPN) framework can be used to explain and interpret the phenomenon of transnational firms' adaptation strategies. Due to market saturation in their home countries, retailers began to expand into East Asia in the 1980s. However, cultural differences and legislative limitations created barriers and restrictions for the transnational retailers making this transition. How do firms overcome these challenges? Through a case study of Costco in Taiwan, this research investigates the ways in which retailers adapt their strategies with regard to three concerns: site decisions, product mix selection, and supply network consolidation. The results shows that Costco opted for a strategy of lesser localization in all three domains. This research provides evidence to support this characterization along with examples of Costco's localization strategies via a case study and focuses on the issue of the balance between localization and standardization in the GPN framework.