Costco is known for its strong culture, in 2013 Co-founder Jim Sinegal was asked if he thought culture or strategy was more important. Sinegal responded “I've stated this in the past, and my comment is that culture is not the most important thing in the world. It's the only thing” (Nyrnes, 2013). Costco excels at every level of the organizational culture and it shows. This is obvious when shopping at Costco, due to this deeply ingrained organizational culture there is an exceptionally positive external environment. The employees all project a positive attitude, willingness to help, and genuinely care if you have a great shopping experience. Sinegal attributes maintaining such a strong culture is the result of treating Costco like a small business, …show more content…
This level influences what the public observes when they visit the stores. This is where policies and procedures are created dealing, with every aspect of the organization. I believe the most important part of this level is how the company treats their employees. While company’s like Walmart have an estimated 50% annual turnover rate (Zimmerman, 2004), Costco boasts a 25% turnover rate. While Walmart pays their employees just enough to place a full time employee over the poverty line, Costco pays its employees approximately 40% higher wages. In addition to higher wages, Costco instills that they really care about their employees. Sinegal was asked in an interview what keeps the turnover rate so low at Costco. Sinegal responded, “We love them” (Nyrnes, 2013), and went on to explain that his employees play a pivotal role keeping Costco going and he wants them to feel like the company cares for them. In the Motley Fool interview Sinegal explained that Costco try to promote from within the company since this gives people the feeling they have a chance for advancement, to think of Costco as a career and not just a job. These ideas are part of what makes Costco the company it is. The culture Costco instills shows that they aren’t purely interested in turning a profit like other retailers, they really care for the
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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...
1. Costco claims to break all the rules in retailing yet continues to be one of the most successful companies in the supermarket industry. In the context of the four P’s, select four unique Costco tactics identified in the video and explain how each of them help drive Costco’s success in the market (5 points).
“Culture is not the most important thing. It’s the only thing.” (Gabler, The Magic in the Warehouse, 2016). It has been said that “Costco acts more like a cheerful cult than a hard-driving business.” (Gabler, The Magic in the Warehouse, 2016). Costco hasn’t wavered from their founder’s strategy of promoting within; over 98% of their management started their careers with Costco. This strategy clearly works; the environment is one of family not just coworkers. They are loyal to the brand and motivated to work hard and climb the corporate ladder. Costco sees this as ensuring the future of their values which in turn ensures their
Costco is a very successful company that will continue to rise and become even more successful in the future, all because of the management. It is inevitable that Costco has to have a great management style because the company is so large and is doing so well. How do they keep the company running great though? How do they keep their employees and customers happy, while making money at the same time? In this essay we will find out how the CEO’s and managers run this company. We will learn the style of management and how Costco keeps the employees and customers happy.
There are two main types of motivation when people work for an organization: intrinsic and extrinsic. From those two, various types of motivation can be derived ranging from achievement and competence motivation to fear motivation. Costco utilizes various motivational techniques and we can analyze them from the traditional, human relations, and human resource approach to determine how Costco is different from most retail store of similar size. From the Human Relations approach, Costco has a low turn-over rate even with the use of part-time workers, the insurance enrollment period is lower than that of other retail stores, and the portion of health care premium paid by the company is over 92% From the traditional view, Costco has a higher wage on average, well above that of minimum wage by at least 40%. From the human resources perspective, Costco chooses most of its management position from its internal workforce.
Each organization big or small has its own values, ways of doing things and assumption that it operates in. The principles and ethics that exist in each of these companies are the baseline through which the company operates its affairs. This is what can be called as that organization’s culture. The culture in existence has an impact on the productivity, effectiveness and efficiency (Keyton, 2011). The basis of setting the most appropriate culture of a company is not only to move or increase the profitability but also to make the stakeholders happy and satisfied. One aspect of that is the employee or the human resource the firm who put their expertise in the firm and add a bit of creativity and innovativeness to move the products. Chick-Fil-A operates in a competitive industry thus it requires all the stakeholders.
The Costco case shows that their business continues to grow and expand. The company now has operations in many overseas locations. Costco is one of the biggest retail companies on earth (Gregory, 2017). Costco has the fundamental strengths to take advantage of unseen opportunities in the retail industry. The company’s low prices make it attractive even when there are economic difficulties. Costco has a basic strategy, which centers on driving sales. This company drive is why Costco is the most prosperous business in the discount store space.
Sinegal inspire loyalty in his employees by treating them like human being and not as means to an end. Sinegal values his employees and doesn’t sees them as tools to make money. Compared to competitors Costco providing great pay and a great health plan. Costco’s average pay is $17 an hour, 42 percent higher than its fiercest rival, Sam’s Club. And Costco’s health plan makes those at many other retailers look Scroogish. One analyst, Bill Dreher of Deutsche Bank, complained last year that at Costco “it’s better to be an employee or a customer than a shareholder.”
The organizational culture at Home Depot provides the framework through which individuals and groups interact and behave in the company. A corporation’s organizational culture refers to the system of ideas, routine, traditions as well as expectations which impact on the behaviors of the company’s stakeholders including employees and the clientele base (Jha & Srivastava, 2014). At Home Depot, the workers demonstrate the firm’s organizational culture in a bid to maximize the level of customer satisfaction. Arguably the biggest retailer of home improvement in the U.S., Home Depot applies organizational culture to make certain that the work environment motivates the workforce and at the same time ensure that patrons feel welcome. Additionally,
Since I have been back in school, one of the things I have learned is that every company has a culture and every person as a brand. These are very important in the growth of a organization, business, or person. So I have decided to look into the organizational culture of two companies. One of supports the needs of people and the other the wants of people. The other supports the wants of the people. I have chosen the supermarket retailer H.E.B and the satelite service of DISH network. This important to me because when living in Texas my family gets their groceries from there. I want to know that we are getting what we paid for. I have never had any problems from them and want to make sure that my family and I continue to get that same quality.
This case study will examine the key management practices that make Trader Joe’s successful. Sound management practices have been a catalyst for the long-term financial success of Trader Joe’s. The literature review examines Trader Joe’s approach to management practices. The research will analyze the: employee job satisfaction, management practices, importance of human capital, and contingency planning.
The definition of corporate culture is the beliefs and behaviors that determine how a company 's employees and management interact and handle outside business transactions (Fisher). A culture of a company can very it can be fun and relaxing or uptight and all about business what ever it is the way the company does everything from how they sell their products to how you are expected to work . A lot of people think of Google when they think of place that has good employee culture, but all the extravagant things that they offer doesn’t mean that that is the only thing that makes for a good employee culture. For example the human resource department at Netflix is more typical not offering any nap times or special foods but it offers things on a
Organisational culture is one of the most valuable assets of an organization. Many studies states that the culture is one of the key elements that benefits the performance and affects the success of the company (Kerr & Slocum 2005). This can be measured by income of the company, and market share. Also, an appropriate culture within the society can bring advantages to the company which helps to perform with the de...