Costco Wholesale Corporation And Financial Data

According to the Top 25 Companies for Compensation and Benefits 2014 that was released by Job-hunting site Glassdoor.com, Costco ranked 2th, which was just behind Google. Costco has one of the most competitive benefits packages in the industry. Its employees not only have a full spectrum of benefits, but also may elect coverage for their spouses, children and domestic partners. The company pays a larger percentage of the premiums than do most other retailers, and employee-paid premiums are withheld pre-tax, which means employees get to keep more of their hard-earned money. Costco even runs a website www.costcobenefits.com for its employees to learn its benefits plan.

When it comes to outbound logistics Costco's task is delivery, invoicing, handling finished goods and orders. The way Costco handles all theses various tasks is mostly through assorted distribution and transporting methods. Costco can accomplish their outbound logistics by having a well thought out inventory method. This inventory method lets Costco markets hold up to two full weeks of supplies. Usually the supplies are

Costco has a simple strategy for being one of the leaders in the wholesales, which is concentrating on driving sales. If the sales of a company are good than everything else will take care of itself. While other companies such as Wal-Mart, Target and BJ’s pour money into marketing; Costco has a no-frills approach and doesn’t advertise. Costco focuses on selling fewer items which increases sale volume and

Costco’s infrastructure skills and capabilities support operations for achieving low cost global leadership in warehouse retail sales and better than industry average. Costco’s culture strives to provide a limited variety of quality merchandise goods from private label and some well established brands.

Costco’s competitive advantage is partnering with venders, yet it is highly safeguarded from public release. Very little is known about the process as to how Costco partners with vendors. The ability to have good relationships with vendors allows Costco to maintain their stagey by

It was in the twentieth century that the world was first introduced to a now well-known household name, Costco. In 1976 that the first Costco was opened, formerly known as Price Club, in San Diego. The philosophy of this company is simply stated, “Keep costs down and pass the savings on to our members.” (Costco.com) It has held onto its philosophy of keeping prices low for almost half a century. Costco is self defined as a “membership warehouse club.” (Costco.com) It provides a wide variety of brand name products in their warehouse-style store, and strives to provide all members with the lowest prices that they can offer. Today, Costco is a well known and loved company by consumers.

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.

The attached essay, “One Big Reason Costco is Getting Stronger”, was written for the assigned term paper in my Microeconomics course. The purpose of the assignment was to analyze a current business article as it related to topic of cost leadership. Evaluating this essay within assignment guidelines will allow me to understand how I can improve my writing skills. Utilizing the article, “1 Big Reason Costco is Getting Stronger”by Andres Cardenal, the essay addressed how Costco has become the cost leader in the discount retail industry. Sales statistics proved that since 2006, Costco revenues increased almost two-fold over its competitors, Wal-Mart and Target (Cardenal, 2014, p. 1).

Costco’s CEO, Jim Sinegal, quoted, “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”.2 They stored the inventory on racks above the items being sold in the warehouse. That reduced their labor cost and saved them a lot time on handling and stocking. They treat their manager as enterpeneur and allows them to decide what item should be sold in their store. They odered most of the inventory directly from the manufactures. It either came directly to the store or went to their distribution center called crossdocking depots. The point of these deposts were to reduce the transportation cost by making sure all truck are full when they come the store.

The recent economic expansion of China, which “grew at a rate of 7.8 percent in 2012” (Deloitte, 2014, p. 65), provides an excellent opportunity for Costco to partner with a retail chain. The most appropriate corporate-level strategy is to define the segment of the international market that Costco wishes to focus on. In the U.S., Costco essentially rivals the larger wholesaler and retailer as the chain provides a warehouse of bulk goods for sale. The strategy

Costco Wholesale Corporation was founded by James Sinegal and Jeffrey Brotman in September of 1983 (Thompson, 2008 p. c-32). Costco is one of the largest retail stores in the wholesale industry. Costco mission is to offer their customers low prices on both private and limited selection of nationally branded products in a wide range of merchandise categories. Businesses and families rely on Costco to offer them high quality products and services at everyday low prices. As stated in the 2006 Annual Report: “rapid inventory turnover, high sales volume per warehouse, leveraging an efficient operating structure,

To begin with the external environment for Costco’s operations in the membership wholesale retailing industry, the consumer base is aging. Warehouse shops often operate near important and

The official Costco’ mission statement is “To continually provide our member with quality goods and service at the lowest possible prices”. This statement shows us what drives Costco and their long-term goal is. They want to sell high quality goods and services to their customers, along with the lowest price of the market. Thus it is easy to understand what why the company strategy is how it is: to generate high sales volumes and rapid inventory turnover by offering member very low prices on limited selection of national brand and select private-label product in wide

The membership warehouse concept was pioneering by discount merchandising sage Sol Price who opened the first Price Club in San Diego in 1976. Originally conceived as a place where

In addition, CM also enables the organization to respond better to their customers’ demands, desires and aspirations, and link these to supply-chain possibilities. For example, it could increase retailer’s benefits and profits because CM can satisfy consumer needs due to the mixing of brands that creates more choices compared with traditional brand management. Retailers can also acquire large amounts of data which enables them to evaluate new products in order to create customer value and enhance competitiveness for retailers. On the supply side, suppliers can find out more about consumers’ buying habits and obtain material for new products developed through brand evaluation.