This means that while the business is profitable, it is in a state of constant, intense competition. Firms such as Costco must develop a competitive culture, and constantly benchmark against themselves in order to stay ahead of the myriad of different competitors. The future of this business is only good if competitive advantages and strong brand equity have been established, as is the case for Costco. For them, the industry's competitive situation remains favorable, but only because of their established market position. That the industry has as many favorable characteristics as it does means that there will be more competition....

There are many retailing giants with the means to eliminate the barriers to entry and the creativity to establish new models. That the industry is favorable will attract these competitors and eventually this will be an unfavorable industry in which to operate, but for the immediate future, conditions are favorable for Costco.
Works Cited:

No author. (2007). Porter's Five Forces. QuickMBA.com. Retrieved April 25, 2009 from http://www.quickmba.com/strategy/porter.shtml

Costco 2008 Annual Report. Retrieved April 25, 2009 from http://media.corporate-ir.net/media_files/irol/83/83830/2008_AR_Cost.pdf