> Customers: 65.7 million
> Industry: membership retail
> Parent company: Costco
> Major competitors: BJ’s, Sam’s Club
The business model of membership-based big-box retailers does not lend itself to having a large customer base. Costco and major competitors BJ’s and Sam’s Club charge between $50 and $100 each year in membership fees that grant customers access to their wholesale prices. This means that, while the companies necessarily will have fewer customers than other types of big-box retailers, they will make up for it in the margins with customer fees. Costco is by far the largest membership retailer, with 65.7 million cardholders as of February 12, 2012, compared to Sam’s Club’s 47 million.
> Customers: 103.9 million
> Industry: wireless telephones
> Parent company: AT&T Corp.
> Major competitors: Verizon, Sprint
According to CTIA-The Wireless Association, there are 331.6 million wireless subscriber connections in the United States as of December 2011. This is more than the population of the country. Naturally, domestic growth has slowed dramatically, shifting the focus of businesses to gaining market share. Wireless companies now attempt to deliver products, prices and service that are superior to their competitors’. AT&T is currently the largest wireless provider, with 103.9 million subscribers. Verizon follows, with 93.0 million subscribers. AT&T would be even larger if the Justice Department had not prevented it from purchasing T-Mobile last year because of antitrust issues.
Few industries have been as troubled as the big airlines in the U.S. At some point in their history, more or less every major carrier has gone through bankruptcy at least once. Delta’s merger with Northwest Airlines in 2008 made it the largest carrier in the world. As of 2010, the company reported 110.9 million annual enplaned passengers. The next largest company, Southwest, had 106 million passengers. The merger between Continental and United, approved at the end of last year, may cause Delta to lose its number one spot in the coming months.
There are at least 225 million registered Apple iTunes accounts worldwide. These are accounts that are tied to a credit card. After reaching the 200 million mark in March 2011, the now-late Steve Jobs stated that “Amazon doesn’t publish their numbers. But it’s very likely that this is the most accounts with cards anywhere on the Internet.” Apple’s iTunes Store, which originally sold only media content, has benefited greatly from the addition of the Apple App Store. On March 5, 2012, Apple announced that customers downloaded 25 billion apps.
Visa, MasterCard and American Express (NYSE: AXP) have been in the business longer than most of the other smaller competitors. This has allowed the three companies to remain dominant for most of the last several decades. As of 2010, Visa had nearly half of the nation’s market share, at 49.6%. The next-largest competitor, MasterCard, had a 33.4% share. While American Express, which had just an 8% share, must rely on its own marketing to distribute membership, Visa can use banks as issuers, making it much easier to gain the kind of market share it has.
Charles B. Stockdale & Douglas A. McIntyre