Essay On Costco

After reading this it makes me want to be a manager for Trader Joe's. There making a lot of money. But with the workers that work for them there given a lot of benefits with all the health, dental, vision and etc. Also they're given promotions from within philosophy because they're privately own. Also they tell there employees to try the produce so when someone has a question about something they can take them to something that is something there thinking about or better. Trader Joe’s has designed jobs to increase job satisfaction by showing appreciation in providing more benefits to their employees than other chain grocers.

The strategic objective of Costco is based on the concept of offering members very low prices on a limited selection of nationally branded and selected private label products in a wide range of merchandise categories while producing high sales volumes and rapid inventory turnover. This rapid inventory turnover, when combined with the operating efficiencies achieved by volume purchasing, efficient distribution and reduced handling of merchandise in no-frills, self service warehouse facilities, enables Costco to operate profitably at significantly lower gross margins than traditional wholesalers, discount retailers and supermarkets. (1)

Costco Wholesale Corporation operates an international chain of membership warehouses, which carries quality, brand name

When it comes to warehouse-style club stores, there are really only four names out there: Costco, Sam’s Club, Wal-Mart and BJ’s. This paper will discuss the Costco and BJ’s. The different type of strategies being utilized by each company, the purpose of the financial statements, their Vertical & Horizontal analysis, how each financial rations ties into the two company’s strategies, Solvency & Performance for each company, a SWOT analysis of each company and finally if the expectations of the stakeholders of each company are being met.

Costco’s business model is interesting because they are proficient enough to persistently promote to a niche market. By propounding the finest products feasible at

Costco has many risks associated with its financial and operational performance. One of the biggest risks that Costco is facing todays is the competition from other retailers and wholesalers, such as Wal-Mart and Target. Costco compete with its competitors for customers, qualified employees and management personnel, suitable sites and suppliers. The retail business is extremely competitive and continues to get even more completive. Such events as the evolution of retailing in online channels has improved the ability of customers to compare prices and products and as a result enhanced competition. Any significant increases of competition may adversely affect Costco’s financial performance, and make Costco incapable to compete successfully in the future.

Costco’s business model is focused on producing high sales volumes and rapid inventory turnover by offering members low prices on a limited selection of national name brands and select private-label products in a wide range variety. Costco is focused in low-cost strategy is concentrated on a narrow buy segment and out competing rivals by having lower costs, therefore being able serve a niche consumers at a lower price. (Gamble, John and Thompson, Arthur (2009)

Matured Customer Base, COST’s customer base is affluent and royal, but advancing in age. While Costco has a broad customer base, its customer base tends to be the more affluent baby boomers’ generation. Although the Baby Boomers generation make up most the affluent customer base, as these customers age, they will spend less. COST must try and attract younger customers, who are savvier e-commerce shoppers, which relates to the Website emphasis discussed above, but also hold the keys to the next generation of affluent

Costco is one of the most profitable retail stores in the United States at the moment. This is in spite of the prevailing tough global economic times and stiff competition from stores such as Wal-Mart and Target. Costco, a members’ wholesale retail store, was founded in 1983 in Washington by Jeffrey Brotman, who serves as the current Chairman of the board of directors and James Sinegal, the current company president. Costco has not been spared by the current global economic conditions. They have affected it in a number of ways that have made the company’s management respond in a manner that is meant to ensure that the business not only survives but grows even stronger. First, Costco has taken strong measures to keep

A Costco’s manager needs to know different information from the investor for the mere fact that the manager has to plan, direct, and control the entire organization (Edmonds, Olds & Tsay, 2008). The executive is aware of the company’s external affairs but mainly focuses on the information that affects the business internally. The manager deals with issues that pertain to the finances of the firm as well as making sure to disseminate information to employees at all levels. Managers are the heartbeat of the enterprise. Managers are responsible for informing the employees about nonfinancial information such as work schedules, store hours, and customer service policies (Edmonds, Olds & Tsay, 2008).

Costco Wholesale has generated a revolution in how people shop: for the first time, many Americans are willing to 'pay' for the privileges of membership to a store so they can buy its products and save money. Like Wal-Mart, Costco prides itself on its low, low prices. However, in stark contrast to Wal-Mart, Costco has also made its exemplary treatment of its employees part of its marketing and sales strategy. It advertises itself as an ethical company, a company where it is a pleasure to work. This use of its HR police as a marketing strategy has proven to be effective, particularly with its target audience. While it caters to a wide and diverse audience in terms of its product diversity, on the whole Costco's target consumer is more affluent and educated than the average consumer at a big box store like Sam's Club. Costco's target audience members are interested

According to Deloitte’s 2014 Global Powers of Retailing Report, it identifies the 250 largest retailers around the world based on publicly available data for fiscal 2012 encompassing companies’ fiscal years ended through to June 2013; however, here mainly focuses on the Top 10 retailers’ analysis.

The first of Porter’s Five Forces that impact Costco is the threat of new entrants. The threat of new entrants into the wholesale and membership retail space is low. There are several reasons why the threat of entrants into the market is low. The leading reason why the threat of entry is low is because an emerging company will struggle to have the volume necessary to compete with Costco. Costco is the sixth largest retailer in the U.S. As a major retailer, Costco has the highest discounts on a majority of its

Potential new entrants into the market are a low threat for Costco. We have the advantage of economies of scale and having learned by doing. Our economies of scale come from better management coordination of processes, long term relationships with our suppliers, and enhanced employee performance with low turnover (Pearce et al., p. 100). The cost for a new entrant would be significant given the capital investment required to start up a warehouse business. Any

Another way Costco is able to maintain rapid profits is by offering a “broad range of brand name and private-label merchandise at extremely low prices” (Kotler, Keller 524). What makes this strategy so unique is that Costco only carries “3,750 SKU’s” compared to Walmart’s 150,000 SKU’s (Kotler, Keller 524). Because the company only carries the most popular brands, package sizes, flavors and models, Costco is able to manage their inventory efficiently and maintain a high-inventory turnover. Thus, the products are not sitting on the shelves spoiling and the shelve space is maximising its revenue capability. The faster inventory turnover, the faster new products can replace the old, which optimizes profitability. Otherways Costco optimizes their space and resources is through their store design. Selling products off of pallets decrease the time, costs and manpower it takes for a product to be placed on shelves. When an order comes in, it can be immediately sold. Moreover, their low-cost energy usage, simplistic signage, and the use of recycling boxes instead of providing shopping bags helps Costco to maintain their mission of providing “the lowest possible prices” (Kotler, Keller). Due to these extreme cost-saving measures, Costco is able to increase employee wages. In turn, this increase employee retention, which generates more a more knowledgeable staff, which increases customer satisfaction, which then increases customer loyalty and customer retention. All of the