Costco Business Model Essay

The high customer relations have allowed the company to constantly provide and improve its product and service quality. This means that the company’s priority is quality for the products and services they offer to its clients. The quality culture has enabled the company to be successful in the retail industry with excellent customer satisfaction ratings (Pahl et al, 2007).

Are CEO's Paid Too Much? OUTLINE This report explores the issue of the pay that top executives make, and the reasons why they do. It also suggests improvements that can be made to make the system better. High Pay Seems Small When Compared To Company Profits Many companies pull in profits that are extremely high. When an employee of such a companies salary is compared to the amount of profit that the company earns, it starts to seem reasonable.

Horizontal mergers are likely to create value for shareholders because they combine firms in the same industry, thus the opportunity for synergies is very high. As competition decreases, market share and pricing power increase. Horizontal mergers often create economies of scale, allowing companies to offer the same product at a lower production cost. 4. The acquiring company is forced to compete against other firms, which drives down the gains that its shareholders can realize from the deal.

The readers can predict the profitability of the company. It will help them enables to see which companies are going to keep abreast of their own operating situations in order to take effectively countermeasures. Moreover, the profitability prediction guides the investors to understand the corporate value and to make reasonable decisions while doing the investment.” (Zhang, 2015) The profitability ratios into two types: margins and returns. The margins will represent the company's ability to translate sales into profits at the stages of measurement. It will include how the company sell their products by minimizing the cost and maximizing the profits.

Corporations in our society today are always seeking out ways to cut costs, resulting in payback to their employees and stockholders. One technique that many corporations in America are looking towards is international outsourcing. The outsourcing of jobs is proving to save corporations large sums of money because the wage that is paid to workers in other countries is much cheaper than here in America. Many of these jobs that are being outsourced are entry-level positions, factory jobs and Information Technology jobs. Finding a way companies can save and reinvest that money into their products or pay it back to their shareholders has proven to benefit the corporations and its’ stakeholders.

It is well accepted that customer satisfaction is both a goal and a marketing tool for customer-centered companies (Kotler, Keller 2012). Customers’ satisfaction with their purchase is a significant factor that leads business to success. In recent times, customer satisfaction has gained new attention within the context of the paradigm shift from transactional marketing to relationship marketing (Sheth, Parvatiyar 1994). Organizations can accomplish customer satisfaction by satisfying their customers’ needs and wants (LaBarbera, Mazursky 1983). Customer satisfaction as a judgment that a product or service feature, or the product or service itself, provides a pleasurable level of consumption related fulfillment (Oliver 1997).

It constantly improves the productivity of American retailing, encourages competition and outsourcing, provides quality items at a low cost, is a stepping stone for retail workers, and creates business opportunities for other companies. Voted “America’s Largest Corporate Cash Giver” by Forbes magazine in 2003, Wal-Mart is also very generous to charities around the world. Wal-Mart is not detrimental to our economy or our country. It is a fundamental puzzle piece that is merely a strong player in today’s neoliberal game of capitalism. Lets face it, the good old days when producers dictated what appeared on the shelves of stores is now over, and in place is a buyer-driven chain where the consumer dominates.

This local approach to marketing appears to be a key driver for success. Tesco has a good range of products, including own label products. It seeks to provide excellent customer service, and ensure high levels of customer satisfaction.

Though Davis and Moore claim that these salaries are positively functional for society because it brings the qualified people into the highest positions, it can be argued that are a number of functionally necessary jobs that are being compensated much less. Karl Marx states that wages and salaries are created on the basis of human needs, but for CEOs to be making millions exceeds what humans need to survive. Examining this information, it is clear that the soaring salary of executives needs to be tamed before the issue of income inequality becomes irreversible.

Cash means a lot to a company and being able to collect cash faster than their competitor gives them more option. Costco’s asset turnover is higher which means how many times Costco sells or turnover its asset and this is a sign of high efficiency. Costco is known for being efficient internally and externally. Costco takes the upper hand is utilizing their assets to generate sales.