Research Paper On Costco

Although each business establishment may provide low prices, it is not strictly about the cost that is valued as a customer. For instance, one of the values is the ability to purchase product in mass quantities for the lower price. Buying in mass quantities not only keeps the pantry stocked, but it also decreases the number of trips to the store which saves precious time for individuals that are always on the go. Another value that is viewed as important, is the value that a company places on the employees and customers. It is of the opinion, that companies should consider what keeps the establishment in business in the first place and that is both the employees and customers. Costco demonstrates this by above adequate compensation for employees and the empowerment given to managers, in addition to catering to the wants and needs of the local market and quality customer service.

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)

He flies to several Costco’s around the country daily functioning himself as the man in charge, making sure all store managers are in accordance to his view on how his stores should be operated. He is also looking out for his employees through increased wages and benefits. He believes by being a lowest-cost producer along with highest wages, Costco will have better productivity over its competitors.

Promote From Within: “Promote From Within” strategy is promoted by Jim Sinegal, the founder of Costco. Costco does not hire business school graduates but cultivate employees who

In my understanding of the case study one the CEO Jim Sinegal has proven to be an effective CEO. I would give Mr. Sinegal a “B+” in overall strategic Management Process. In developing a strategic vision he has visualized who, what, and how he is going to sell Costco products. The managements vision is to have rapid inventory turn-over, with operating efficiencies by volume purchasing, efficient distribution, reduce handling of merchandise in no-frill, self-service warehouse facilities. This will enable the company to operate at lower price then their rivals and continually offer members lost cost merchandise.

Chief elements of Costco’s strategy were low prices, limited selection, and a treasure-hunt shopping environment. The ultra-low pricing strategy includes a mark-up capped at 14% and Kirkland, a Costco brand designed to be of equal or better quality than national brands. Product Selection is limited to 4,000 items within a wide variety of categories. Costco does however include ancillary businesses to increase member alternatives. The loss of sales from customers who refuse to purchase large amounts is considered “Intelligent loss of sales.” Treasure-Hunt Merchandising consists of a constantly changing selection of 1,000 luxury items on the floor enticing shoppers to spend more than

Costco Wholesale Membership is one of the biggest membership warehouse club chains not only in America but across the world. While I personally have fallen prey to the sticker shock while checking out, I always ask myself why do I continue to shop here, what makes shopping here so special for me and everyone else in this 10-person deep check-out line, and what makes Costco one of the largest retailers in the world? The lack of advertising outside of the monthly Costco Connection magazine and coupons to existing members cannot be mistaken for lack of marketing since Costco is thriving. While I ask myself the above questions inevitably when someone inquires where I have purchased x, y or z or when I am talking about x, y, or z product 100% of the time I have purchased it from Costco. Co-workers and I exchange weekly our recent Costco finds. These Costco finds have expanded beyond the warehouse. We have discovered the world of

He challenges the employees and encourages them and creates a dynamic environment which motivates them to always work hard. (Dreamforce 2012) He believes to never second guess the person he delegate and the importance of the freedom to make mistakes. He wants to motivate them to be entrepreneurial and ready for their next venture.

Once he created his mission and vision, he found that keeping the customer satisfied and continuously taking care of them ,with his attention to detail, gave him more satisfaction with his job. Taking risks by buying ailing companies gave him autonomy since he was unaware of the outcomes but still had strong feelings that it would all work

The Costco strategy for getting into the wedding gown business is to have a set of touring trunk shows at its Western stores during the season where people are planning their weddings. Costco's typical pricing strategy is to undercut competition and make up for this with high volume sales. The company applies this strategy to the wedding gown business as well. Costco offers one of the lowest prices of any company on its wedding dresses. The company's business plan ensures that the details have been fleshed out, and that has led to the unique distribution strategy for wedding gowns.

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.

The strategy for Costco was that the company continued to buy merchandise at volume discounts from manufacturers, rather than distributors. The stock is usually shipped directly to selling warehouses to minimize freight costs. Stocked items are placed directly onto the selling floor or are still stacked on their pallets, reducing handling and stocking labor. The number of sales and service employees is also minimal, with a large percentage of the employees holding part-time status. Warehouses are almost entirely self-service, from finding and buying items, to loading them into a customer's vehicle. (Miller, 2011)

The Industrial Revolution reshaped the world and expedited how business was conducted through the use of railroads and steam engines. Department stores soon evolved after and revolutionized how shopping was done and centralized a variety of merchandise at one central location (Tayan, 2003). With the introduction of 20th century operational management strategies such as Just in Time (JIT) and Lean Manufacturing, companies had to alter its operational efficiency and the way it conducted its business in order to grow and stay competitive. Costco Wholesale Corporation entered the wholesale club industry in the early 1980s (Tayan, 2003). The idea behind a wholesale club was to maximize profits by minimizing operational costs

Throughout history there have been many successful companies as well as companies that have been a debacle. The success of the company has to do with the management and how it executes its strategy. If the management is ineffective, the company will most likely fail; however, if the company has good management it is more likely to prosper. There are many responsibilities that a manager must complete, chief among them are the four functions of management are planning, organizing, leading, and controlling (PowerPoint). In order for the company to be successful the management must fulfill all four functions. In some case not all four functions are met to expectation, with the results that the company to be not as successful as it could be if they

Maverick is based on the author’s experience in his organization “Semco”. Semco, with its Maverick management style, challenges the system of conventional management styles. Ricardo Semler after taking reigns from his father went into uncharted waters and developed a management style that transformed a traditional company into dynamic and innovative company, which has the world’s most unusual workplace.