Analysis of an International Organization: Costco

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Analysis of an International Organization Nature of the Organization Costco’s business strategy is different from their competitor’s in the wholesale retail industry because their purpose is to keep overhead down and pass the savings to their customers. They do this by choosing not to advertise, sell fewer brands and having an innovative approach by having their own manufacturing facilities for a variety of merchandise. Costco does not market their warehouses and their marketing is through word of mouth from current customers who also must have a membership to shop at Costco. When compared to Walmart Costco sells four brands of toothpaste and Walmart sells sixty brands of toothpaste. Costco can buy more for less from the manufacturer of the four brands of toothpaste and pass the savings on to their customers. Costco’s strategy is to sale a limited number of items because this strategy according to (Lutz, 2013) “increases sales volume and helps drive discounts.” Because of Costco’s profitability in the retail market they have managed to continue to be profitable even in an oppressed economy. Costco’s focus is on high-end customers indicated by some of the brands they carry such as Coach Handbags. Costco offers three different levels of membership and is only open to customers who have a membership. Costco’s philosophy is they do not advertise or markup items more than 15% in order to save their customer’s money. These practices lowers the overhead costs and continues passing the savings to the customer. Costco is an international company and has (Costco Wholesale Corporation, n.d.) “462 locations in 43 U.S. States & Puerto Rico; 87 locations in nine Canadian provinces; 25 locations in the United Kingdom; 10 locations in Taiwan; 9... ... middle of paper ... ...les-gender-discrimination-lawsuit-for-8-million/ Gullo, K., & Fisk, M. C. (2009, May 16 Karen Gullo and Margaret Cronin Fisk). Costco Sued by Worker for False Imprisonment After Stores Close. Retrieved from Bloomberg: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=arFyn8XqNe4g Keahay, M. (2013, June 24). Costco manager files age discrimination lawsuit. Retrieved from Southeast Texas Record: https://setexasrecord.com/news/286696-costco-manager-files-age-discrimination-lawsuit Lutz, A. (2013, November 7). Costco's Unorthodox Strategy To Survive The Big Box Apocalypse. Retrieved from Business Insider: http://www.businessinsider.com/costcos-unorthodox-business-strategy-2013-3?op=1#!HLSsM SANTOS v. COSTCO WHOLESALE, INC. (2003, July 9). Retrieved from Leagle: http://www.leagle.com/decision/2003836271FSupp2d565_1789.xml/SANTOS%20v.%20COSTCO%20WHOLESALE,%20INC.

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