Costco Wholesale Business Analysis

When working for a popular warehouse chain like Costco, you must have a manager that monitor and organize its operations. Managers are the main elements in an organization. Most managers take the leadership role and allocators of resources in the organization. Working as manager at Costco stores you would need knowledge of accounting information in order to properly run a successful business. Managers make sure that they fully understand how engage in performance appraisal in order to figure out profitability and productivity , so managers can assess their employees and determine any area training . Becoming a successful manager in such a big organization like Costco you will need accounting information to determine whether you should buy ,

Costco Wholesale Corporation’s organizational structure is based on the company’s current operation and locations as well as the market. The organization structure is the shape to connect different organizational components to address the business needs. Costco’s organizational structure active enables the management of operations in different markets. Even though Costco is the biggest membership warehouse club in America, and designed it structure for success in the management of it business in the U.S. and overseas. Costco would have to change its organizational structure within time to suit the expanding global operations.

Retail industry sector encompasses companies and individuals that are engaged in selling products to consumers. As the biggest economy in the world, retail industry in the U.S. is one of the biggest industries in the world with total sales of nearly $5 trillion in 2016 as per www.census.gov. National retail foundation’s report mentions retail industry as the largest private sector employer in the United states with about 15 million people working in the industry. Retail industry in the united states comprises brick and mortar stores and a growing e-commerce sector.

The first Costco location was open in 1976 under the name Price Club, which was dedicated only to small-business. In 1983, the first Costco warehouse location opened in Seattle open to the general public. Throughout Costco’s main philosophy, to keep costs down and pass the savings on to their members, the company became the first retailer to reach $3B in sales in less than six years since its debut (Costco, n.d.) and in 2014, according to National Retail Federation (2014) the Company was the third largest retailer in the United States, behind Wal-Mart Store and The Kroger Co. Today, Today Costco has 698 warehouses worldwide, Canada (89), United Kingdom (26), Australia (8), Mexico (34), Taiwan (10), South Korea (12), Japan (20), and Spain (2) and over 200,000 full time and part time employees (Costco, n.d).

While there are currently other wholesale companies out there, Costco was a main driver of this type of business when the craze of buying in bulk first started. Costco did not start off as Costco but rather it stemmed from a partnership with a business called Price Club. Their simple business and marketing model allowed Costco to grow into a multibillion dollar organization. Price Club was started by an individual named Sol Price in the late 1970’s in the west coast. There first store was in a converted airplane hangar on Morena Boulevard in San Diego.

The retail industry has always been a large portion of the U.S. economy. In 2012, the industry had nearly one million stores and accounted for four trillion dollars in revenue. An estimated two-thirds of the U.S. GDP

The first case question asks to compare and contrast shopping experiences at retailers like Nordstrom, Costco, and Whole Foods with shopping experiences at other retailers Sears, Walmart, or Kroger. First of all, retailers like Costco, Nordstrom, and Whole Foods can be insanely expensive. But there is also the option of buying bulk items (Costco), brand names (Nordstrom), and better quality (Whole Foods). I just went grocery shopping for produce and decided to change it up (I usually go to Albertsons or Costco). I went to Walmart to get some spinach, apples, and blueberries. When I got to the produce section I was hesitant because of the quality. Most of the bags of spinach looked wet and slimy, while the apples were soft and slightly bruised.

Researching companies without the annual report is like exploring a cave without a flashlight. This analysis of Costco Wholesale Corporation proves stakeholders benefit by using information published in annual reports to analyze the past, present and future financial well-being of publically traded organizations. Whether one is an investor, a commercial loan officer, financial analyst, or a manager of the corporation, the annual report provides insightful data and information that is crucial in determining profitability, liquidity, debt, risk factors, sustainability, competitive environment and overall health and likely direction of the company.

According to the Food Retail Industry Profile, Costco has an advantageous advertising program such as the Costco connection, a publication for associates, coupon mailers, weekly email blasts from costco.com, and handouts. These are directed towards current members for promoting selected merchandise. Additionally, Costco offers valuable services such as digital photos processing, travel, business delivery, pharmacy, and membership services. One important point to mention is that Costco also manages gasoline stations at many of its U.S. locations which is very convenient for almost all its memberships, and what to say about its price it is more economical than in other places.

Now headquartered in Issaquah, Washington, Costco is committed to quality. It’s a place for discovery, a no-frills location offering extensive sampling. This is a place of tremendous variety. You can have your oil checked and your tires changed, eat lunch and buy Christmas toys. You can outfit your whole family from head to foot, purchase eye glasses, heart meds, and hearing aids. You can get birthday cakes, Thanksgiving pies, and Christmas wrapping paper. Go organic, buy a wedding ring, or take a vacation, it’s all available at Costco. An interesting fact is, most stores carry over 30,000 units of stock on their shelves while Costco only keeps 4,000. The result, more than 10 million members can receive the best quality, price, brand, features, and value this establishment has to

Costco Wholesale’s sales/revenue growth has been decelerating over the past few years (105.16B in 2013, 112.64 in 2014, and 116.2B in 2015) [1] but Wal-Mart Stores Inc.’s growth slowed down drastically in years 2013 and 2014 and it is only picking up again in year 2015(469.16B in 2013, 476.29B in 2014, and 485.65B in 2015) [2]. Over the past few years, Wal-Mart Stores Inc.’s net income plummeted in 2014 and recovered slightly in 2015, on the other hand, net income growth has been steadily increasing for Costco Wholesales. Wal-Mart Stores Inc.’s Sales/Revenue is more than 4 times than that of Costco Wholesale's (485.65B for Walmart and 116.2B for Costco in year 2015) but Wal-Mart Stores Inc.’s profit (net income less taxes) is more than 6 times than that of Costco’s(16.18B for walmart and 2.38B for costco for the year 2015) [1] [2]. Wal-Mart Stores Inc. is somehow doing better than Costco Wholesales in that area. In the year 2004, around the time

Costco is one of the nation’s top three retailers and the world’s largest membership warehouse chain, Costco wholesale Canada operates about 80 membership warehouse clubs across Canada. The company never advertises, charges its 64 million members to shop there and doesn’t mark up any product more than 15 percent, even at this lowest profit margin, 15% for Kirkland private brand, the products were 20% lower than comparable to other brand products. Costco works with this business model and generating $93 billion in annual sales.

From a strategic perspective Costco is performing extremely well. They are making record high profits as stated in 2012. They are also acquiring new customers continuously from households and new businesses. Their strategy is to sell you products in bulk quantity and wholesale. Another part of it consists of purchasing a limited selection of quality merchandise with efficient distribution and a wide range of product categories and rapid inventory turnover.

In 1983, Costco Wholesale Corporation, the fourth-largest retailer in the United States, was founded by former Price Club executive, Jim Sinegal, and lawyer Jeffrey Brotman. Costco focuses on selling products at low prices in bulk packaging and focuses mostly to large families and small businesses. They sell products like flat-screen TVs, gallon jugs of mayonnaise, and coffins. Costco operates 556 stores worldwide: 405 in the United States, 77 in Canada, 31 in Mexico, 21 in the United Kingdom, 9 in Japan, 7 in South Korea, 6 in Taiwan, and 1 in Australia. Costco employs 140,000 employees and accumulates $70 billion in annual sales. It became the first company to rise from zero to $3 billion in sales in less than six years, and reached

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