Costco Is A Well Known And Well Liked Wholesale Corporation

Rae and Wong (2012) profiled Costco as a company which creates wealth for shareholders and value for customers while compensating employees well and treating suppliers fairly. Even though Costco facing critiques of operating more like Walmart with reduced wages and less benefits, the company stands strong in their desire to treat everyone involved with the company fairly (Rae & Wong, 2012). As CEO of Costco, Jim Sinegal, noted in serving employees that honesty and performing what is right cannot be the sole responsibility of management and everyone must comprehend what the rules are everyone should be mortified id Costco and its people do not behave as they are expected (Rae & Wong, 2012). Essentially, Sinegal relies on values and integrity throughout the ranks with servant leadership to perform appropriately and calls on anyone to report and object to anyone acting

turnover, which is made possible by low prices and limited product selection. This business model is appealing for them and has many benefits. Firstly, by setting up the business approach to rapidly

What is Costco’s business model? Is the company’s business model appealing? Why or why not?

In order for Costco to stay competitive in the market and ahead of its competitors, it is essential to venture into different products and services. Costco’s main products vary, which include: groceries and frozen products, fresh meats and produce, bakery goods, beverages and liquors, health and beauty products, seasonal goods, office products, appliances and electronics. To increase Costco’s product differentiation over its competitors and increase sales, Costco began to introduce other products; such as pharmacy, gasoline, auto insurance, and a food court. In addition, extends more services to executive card members that include check printing, payroll services, identity protection, free roadside assistance with Costco’s auto insurance, and traveling benefits.

Did you know that Costco has over 500 warehouses that operate in 40 different states! Two men, James Sinegal and Jeffrey Brotman, founded Costco in 1983 (Company Overview, 2014). Costco’s warehouse has one of the largest product category selections when being to compared to other warehouses. Costco is known for carrying the best quality brands at low prices. According to Jim Sinegal, the Company 's Co-Founder and Director, "Costco is able to offer lower prices and better values by eliminating virtually all the frills and costs historically associated with conventional wholesalers and retailers, including salespeople, fancy buildings, delivery, billing and accounts receivable. We run a tight operation with extremely low overhead which enables us to pass on dramatic savings to our members (Company Overview, 2014)”.

The first warehouse store was opened in 1976 by Price Club which was founded by Sol and Robert Price in San Diego, California. Initially it was open only to Business shoppers. By 1983, Jim Sinegal and Jeffrey Brotman created Costco and open its first membership warehouse in Seattle, Washington on September 15, 1983. Within the first three years Costco had opened 17 more warehouses in other locations, had 1.3 million members, and 3,740 employees (Costco, 2014a). Costco expanded

Costco was originally under the name of Price Club, which was opened in 1976. A group of friends raised money to open a the first location. The original Price Club was in a converted airplane hanger. In 1983 the first warehouse that was opened under the name of Costco was opened in Seattle, Washington. Costco became the first company ever to grow from zero to $3 billion in sales in less than six years. Costco wholesale has continued to grow in their sales and has been named the most successful warehouse club. Fifty-five million people visit Costco annually, and Costco’s rate of employment, as

Founded in 1976, Costco Wholesale is America’s largest membership club, holding 50% of the market (Evans & Satchu, n.d.). and generating more than $100 billion in revenue in 2013 (Campos, 2013). While the moniker, wholesale, at first implies that this company distributes goods exclusively to retailers, in fact, Costco operates as a value-driven retail warehouse with a simple operating philosophy "Keep costs down and pass the savings on to our members. Our large membership base and tremendous buying power, combined with our never-ending quest for efficiency, result in the best possible prices for our members” (Costco Wholesale, 2016). With this strategy, Costco stands as the third-largest retailer in the United States with over 400 U.S. locations (Evans & Satchu, n.d.). This success can be attributed especially to their pricing strategy. Costco’s pricing strategy is at its core, value based, with auxiliary foci on markdowns, quantity discounts, seasonal discounts, and rebates.

Costco is a recognized and successful retail chain including several locations, glowing feedback, and a wonderful overall reputation. Known by several audiences to be considered a “big-box” store, Costco offers various products in its stores at low, discounted prices, accompanying a membership card. Before and after researching this company, the author of this paper has heard exceptional feedback regarding the company for its initiative to keep prices low, employee morale high, and customer satisfaction to be one of its top priorities. Within this body of work, the author will dissect and discuss some of Costco’s stakeholder perspectives and how some of the perceived initiatives may help aid the company within its

Costco as a company began operations in 1983 with its headquarters in Issaquah, Washington (Costo 1). It was founded in Washington, United States by James Sinegal and Jeffrey Brotman. Brotman comes from a family that had been involved in retail business before the establishment of Costco. Therefore assuming that his background may have prepared him for running Costco

In September 1983 Costco's first warehouse opened in Seattle, Washington. At this time, warehouse outlets had long existed, but the concept of a wholesale club was relatively new and promising. Dubbed "buyers' clubs" and begun in 1976, these warehouses were wholesalers that required shoppers to become members and pay an annual membership fee. The membership fee helped reduce already-low overhead, so that items could be sold at an average of 9 percent over cost from the manufacturer. At the time Costco was formed, membership warehouses were primarily a West Coast phenomenon; however, since then, their popularity has spread throughout the United States, across the borders to Canada and Mexico, and beyond to many other countries.

Costco is a well-known corporation that has excelled in surpassing customer expectations. The company has gained a reputation for having one of the best return policies in the wholesale club industry. The store offers “complete buyer satisfaction” on all of their merchandise by allowing customers to return items with no specific time limit. The only exception to this policy is Costco’s computer technology based products. These products are covered for up to one year from the date of purchase and can only be returned within that time period.

According to Blacktown City Council (2014), Costco Wholesale Corporation operates an international chain of membership warehouses which carry quality brand name merchandise at substantially reduced prices compared to other conventional wholesale or retail outlets. It began its operations in 1983 in Seattle, Washington and later merged with The Price Company in October 1993 operating under the name PriceCostco, had 206 locations generating $16 billion in annual sales (Costco Wholesale, 2015). As of December 2014, the Company operated a chain of 671 warehouses in 43 states, Washington, D.C., and Puerto Rico (474 locations), nine Canadian provinces (88 locations), Mexico (34 locations), the United Kingdom (26 locations), Japan (20 locations), Korea (11 locations), Taiwan (10 locations, through a 55%-owned subsidiary), Australia (seven locations) and Spain (one location). The Company’s online business also operates websites in the U.S., Canada, U.K., and Mexico (Costco Annual Report, 2014).

A Business week article makes an interesting statement that Costco belongs to the very short list of companies with a culture so favorable to employees that it gives the company a competitive advantage, and it’s most likely to keep on rising over many decades. Costco sees workers as an asset to invest in, rather than a cost that must be reduced. In the U.S. Costco pays workers an average of nearly $21 per hour, almost three times the minimum wage and about twice as much of what most competitors pay. They receive great benefits and are part of a safe and healthy working environment as well. At Costco they are committed to providing its employees with opportunities for personal and career growth. Costco has implemented a strategy for a competitive advantage by having a mix of low-cost providers and differentiation. Company differentiates itself by providing consumers with products in bulk at a low per unit cost. Costco offering two types of memberships- the regular and executive membership. With an executive membership, Costco gives a 2% reward on annual Costco purchases. A holder of the executive membership receives incentives for shopping there, which leads to more sales and higher customer visits. This is just one of the many reasons customers keep going back to Costco. It has made itself a highly successful company by offering quality products and excellent customer service.

Costco Wholesale Corporation (Costco) is a retail membership warehouse chain which was founded by Jim Sinegal and Jeff Brotman in 1983. Headquartered out of Issaquah, Washington, Costco has grown in to one of the largest wholesale giants in the industry. The company’s business model was to generate high sales volumes and rapid inventory turnover by offering members low prices on a limited selection of nationally branded and selected private-label products in a wide range of merchandise categories (Gamble & Thompson Jr., 2009, p. 217). This