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costco wholesale corporation case study
costco wholesale corporation case study
costco wholesale corporation case study
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Costco Wholesale Corporation consists of over 500 warehouses worldwide which feature discount shopping for customers without the embellishments of sales personnel and lavishly decorated building sites. As it currently stands, Costco is the largest membership warehouse chain in the United States and as of 2009, it is considered the third largest retailer in the US and the ninth largest in the world. The first Costco Wholesale store opened its doors on September 15, 1938 by James Sinegal and Jeffery Brotman in Seattle, Washington. Costco has since expanded to locations all across the globe including the United Kingdom, Canada, Australia, Mexico, Taiwan, South Korea, Japan, and the United States. Costco currently obtains over $70 billion in revenues which are generated by a workforce of 142,000 full and part-time employees and has approximately 55 million members. In 1993, Costco merged with Price Club and began a renamed venture called PriceCostco and was led by executives of both companies. However, the executives of Price Club left the company in December of 1994. In 1997, the company changed its named to Costco Wholesale and promptly rebranded all existing Price Club locations. The main competitors of Costco are the other major warehouse retail centers Sam’s Club and BJ’s Wholesale club. Although Sam’s Club has many more warehouses Costco decisively retains higher overall sales volume. Costco has been the first company to grow $3 billion in sales in less than six years and has unsurprisingly been ranked number 25th on the 2010 Fortune 500.
Costco’s mission is simple; to continually provide members with quality goods and services at the lowest possible prices. In order to do this Costco conducts their business with the followin...
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... itself on its employees, treating them far better than any of its competitors and it shows because Costco’s largest operation costs are its employees cost. Costco encourages moving up in the company by always hiring from within and supporting positions with training. They provide their employees with a wide range of health benefits to both full-time and part-time employees. Include 401k investment options, which Costco match 50% of the first $1000 and also put additional money into 401k’s for years of service provided.Lastly, Costco offers competitive wages averaging to $17 an hour including bonuses twice a year, which is also weighted by years of service. Since Costco makes employee satisfaction a major priority the majority of their employees stay with the company. This benefits Costco by allowing them to retain highly trained, happy and productive workers.
Customers are able to trust Costco. The company makes sure that people will know the better quality goods that it sells than other companies. The first thing that customers get successful their budget. Many customers or other business will know that their finances would start off growing well. Costco always advertises to customers about their discounts. Customers will have annual to come and Costco, using their member card. They can browse all products Costco will carry. “The Consumer Reports National Research Center surveyed more than 26,000 subscribers about their shopping experiences at 10 of America’s major chains: Costco, JCPenney, Kmart, Kohl’s, Macy’s, Meijer, Sam’s Club, Sears, Target and Wal-Mart.” (Herb Weisbaum)
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...
There are ten elements needed to survive a zombie apocalypse: a steady food supply, clean water, medicine, transportation, gas, a defense system, a sturdy shelter, a safe place to sleep within the shelter, weapons, and simple tools. Costco supplies all of these items. According an article in The Concordian, “If you asked 100 people where they would hide during a zombie apocalypse, 98 would say Costco. Costco is a vast market that sells basically anything you would need to live there permanently” (Menexis). Unfortunately that still leaves those two out of one hundred people that disagree. Those people say that Costco would be an unwise place to be during the apocalypse because of its sheer size. They state that the massive size of a Costco store is too big for a person or even small group of people to defend. While this argument has a logical line of thinking behind it, there are several factors that render this viewpoint invalid. Costco does not need a huge defense system because it is literally a huge warehouse. This means that Costco is essentially a huge concrete box with two ope...
One of the biggest competitors is known as Wal-Mart. With a revenue of $485.651 billion, Wal-Mart is definitely the world’s largest company. According to Walmart’s website, “it operates over 11,000 retail units under 65 banners in 28 countries and employs 2.2 million associates around the world.” Offering numerous items at their lowest prices, Wal-Mart, itself, is the biggest challenger for Costco. At the same time, Sam’s Club is also owned and operated by Wal-Mart and it takes even more profits away from Costco. While the customers can go buy things at Wal-Mart without the membership, Wal-Mart uses the same membership-only strategy for Sam’s Club like Costco. For instance, Sam’s Club offers membership-only services with an annual fee of $45. Sam’s Club offers a wide product category, and it sells almost the same things as Costco. Sam’s Club has 652 warehouses, and its net sales are above $58 billion. Even though Costco is highly concentrated in California, Sam’s Club is evenly spread across the United States. Moreover, Sam’s Club is the only
Price: All the Costco products have a maximum mark up of 15%, keeping their prices competitive and almost always cheaper than their competitors which usually mark up at 25%. In the video the founder is seen comparing the price of one of their products (a toy truck) to Sam’s Club which was offering it at a lower price, and reconsidering their pricing for it. Their pricing does however force the consumer to buy the product in bulk- making them assume that they are getting the best possible price.
Employees want that from their employers. They want to be recognized for the work they put in and it makes them feel great when someone in the higher ups notices what they have done. Those are the type of employees that will come in and do a great job and will stay there. They will tell their friends and family how great their company is and before you know it, friends and family of that worker are shopping there and trying to get employed there. If you keep your employees happy, they will have a better work performance also. They will do their jobs without someone having to stand over their shoulders telling them what to do. Employee will show up to do their job instead of calling out sick because they simply can’t stand to go in and work in a poor work environment. Employees that know their job don’t need someone standing over them telling them what to do. I do agree with Tracy Mullins statement in her article Hiring the Very Best stating “While I think retailers should be hiring the best people possible, and treating them well, it may not always be best to leave them alone”. The work load cannot be placed all on one person and you can still hire the best people possible to come in and help during busy times of the year. People need and want jobs that they are going to love to do in order to be satisfied and remain loyal to the company that they work for. They will have better job performance and remain loyal while be completely happy and satisfied. Jobs that pay more money is another benefit for the employee and that is what they search for too. Employees want to be compensated for their skills. They want to work with an organization that provides good health insurance as well as a good retirement plan. A company that knows how to treat their employees as good as their customers will keep these employees and they will remain loyal to
Compare your shopping experiences at retailers like Costco, Nordstrom, or Whole Foods with experiences you may have had at Walmart, Sears, or Kroger.
Which one is better Buy Now: Wal-Mart Stores, Inc. vs. Costco Wholesale Corporation? Costco is doing better, but Wal-Mart stock is much inexpensive. Which one is a better buy right now? Here are two different retailers with two different strategies. The alternative norms are that Costco operations are entirely based on the warehouse model and membership fees offer customer more of an economic advantage to customers than Wal-Mart everyday low prices and flexible payment with suppliers. My objective is to analyze the two retail giants’ methodology to satisfy and maintain customer although that I anticipate Wal-Mart’s to be a better buy than Costco because of the gargantuan scale of Wal-Mart has constructed its commerce on saving the customer
Costco has one of the most competitive benefits packages in the industry. Not only do they provide employees with a full spectrum of benefits, but employees 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. Costco's customers like that low prices do not come at the workers' expense. And The Costco website offers online tools to manage health.
Costco has many competitors with the primary two being Sam’s Club, a wholesale business being managed by Walmart, and BJ’s wholesale club. Sam’s Club is offering the same services as Costco. They offer their customers lower prices than traditional stores and like Costco they sell their products in bulk to keep members interested. What makes them a threat to Costco is the cost of becoming a member to shop at their stores. For Costco’s basic membership, known as a Business membership, a price increase had to occur to outweigh price increases from their suppliers. This led to the Costco Business membership annual fee being set at $55. When looking into the case study assembled by Thompson, Peteraf, Gamble, and Strickland (2014) they point out that Sam’s Club is able to offer similar benefits ...
In the warehouse segment, Wal-Mart’s Sam’s Club competes harshly with Costco. Costco has fewer warehouses but greater sales and revenues. Costco customers also shop at Costco more frequently than Sam’s Club customers and, on average, spend more each visit as well. Costco’s dominance may be the result of better innovation. Costco offers luxury items and was the first to sell fresh meat and produce, and gasoline. This is important because innovation is a key factor in assessing competitors in an industry.
Costco, a company also known for low prices, but more importantly, known for treating their workers better. Costco workers earn “70 percent more than the average full-time Wal-Mart worker and 40 percent more than the average Sam’s Club worker.” Costco stays true to their business model and their employees. As a veteran and doing research on how companies treat their employees, I saw that Costco has a really amazing recruitment program which is highly veteran friendly. Costco proves that you can have a highly profitable company while treating your employees right (giving them a slice of the
Their boards are similar in member size (Walmart with 12 and Costco with 13). Both companies also advocate for a separate CEO and Chairman. They also have a similar number of meetings per year (Walmart 6 and Costco 5) (Spencer 4). Both companies also utilize executive sessions and Costco, like Walmart, has at least two executive sessions a year for independent directors (Costco 11). Finally Costco also has a code of ethics that applies to all employees, directors and executives. They
Costco was founded on September 15th, 1983 by Jeffery Brotman and James Sinegal (Chesley). It became renowned for its warehouse club retail model, pioneered by former competitor Price Club. After a major merger in 1993 with Price Club, Costco expanded to 206 locations, doubling the size of the company (“Costco Wholesale Historical Highlights”). The decision was based on the fact Costco and Price Club shared similar business philosophies, operations, and the looming threat of being taken over by Sam’s Club. Operating as PriceCostco, international expansion began with development of stores in Mexico, the opening of two stores in England, and the licensing of a Price Club in South Korea ("Costco Wholesale Corporation").
The human resource services at Albertsons appears to be much better than their chief competitor Wal-Mart’s .It is mentioned that the average Albertsons employee earns more than a Wal-Mart ‘s employee. Also employees at Albertsons enjoy benefits like health insurance and retirement packages