Costco Case
Costco: A Case Analysis

Costco has long been a retailer of lower-priced goods. Now, the company is moving toward services like insurance, credit cards, phone plans, printing, and other options that could be accessed with a specific membership level. That level would cost users $100 per year, but testing of the options has been very positive in the majority of cases. Still, Costco has much to consider when it comes to whether they want to continue on the path of services and change what they normally offer that drastically. In order to determine whether they really want to move into more services, they will need to analyze both their situation and their market. Right now, they have good market share for what they offer, but they have no market share in the services market, since they are just considering moving into it. People are not familiar with the Costco brand…...

Costco Warehouse Clubs
Costco Wholesale vs. Sam's Club vs. BJ's Wholesale

The main strategic issue that is faced by Costco (and by Sam's Club to a lesser extent) is the fact that it is having trouble competing with BJ's Wholesale on some key factors of customer service. Costco is a warehouse-style retailer, just like the other two companies. Typically, these companies offer lower prices, but consumers who shop there also need to buy their items in bulk (Thompson, et al., 2011). They get fewer perks, such as fixtures and decor, but that saves them money in the long run. It is a very "no frills" shopping experience which suits many people who prefer to buy their items in bulk and not have to shop as often as they otherwise would (Barrett, 2003; Thompson, et al., 2011). Mostly affluent and middle-class people shop at these kinds of stores, as well as many small…...

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References

Barrett, R. (2003). Vocational business: Training, developing and motivating people. Business & Economics.

Drucker, P.F. (2004). Post-capitalist society. New York, NY: Butterworth-Heinemann.

Gomez-Mejia, L.R., Balkin, D.B., & Cardy, R.L. (2008). Management: People, performance, change. (3rd ed.) New York, NY: McGraw-Hill.

Kleiman, L.S. (2010). Management and executive development. Reference for Business: Encyclopedia of Business.

Costco
The case notes that Costco's mission is "bringing the highest quality goods at the lowest possible prices while providing excellent customer service and adhering to a strict code of ethics…" and then the mission outlines the code of ethics. The company's operations clearly stick to this mission statement. This is possible because the mission statement is clear, and it specifically relates to what the company does. It hits upon a number of different elements of the business that essentially define what it is that Costco does.

The second element is that Costco does these things. The strategy of the company is to be a low cost provider, so a lot of what Costco does is related to that. When we examine the mission, we see that Costco is basically framing the low cost strategy against a backdrop of relatively high quality goods, good customer service and solid ethics. These last three…...

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References

McArdle, M. (2013). Why Wal-mart will never pay like Costco. Bloomberg. Retrieved April 4, 2014 from  http://www.bloombergview.com/articles/2013-08-27/why-walmart-will-never-pay-like-costco 

MSN Moneycentral. (2014). Costco. Retrieved April 4, 2014 from  http://investing.money.msn.com/investments/stock-income-statement/?symbol=cost 

QuickMBA. (2010). Porter's generic strategies. QuickMBA. Retrieved April 4, 2014 from  http://www.quickmba.com/strategy/generic.shtml

Costco Wholesale Corporation is one of the membership warehouse chain operators across the globe. Costco Wholesale Corporation operates under the influence of the standards and regulations of the Wholesale Club Industry. The organization focuses on the distribution of the products with reference to fresh food, soft-lines, and ancillary as well as hard-line products. Costco implements various elements of marketing model with the aim of addressing the needs and preferences of the consumers as well as stakeholders and shareholders in the market of operation. Costco focuses on the provision of quality products and services at lower costs of procurement in comparison to other competitors in the market such as Wal-Mart. This research product will focus on the identification of the two segments of the general environment and the forces of competition affecting Costco Wholesale Corporation. It will also address issues in relation to improvement in tackling the forces in the near…...

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References

Kozloff, Emme P., and Ian J. Gordon. "The Warehouse Club Industry: A Market-Based

Competitive and Saturation Analysis." White Book - The Warehouse Club Industry: A

Market-Based Competitive & Saturation Analysis (2004): 1-36.

"Costco Wholesale Corporation SWOT Analysis." Costco Wholesale Corporation SWOT

Costco's business model is to undertake a cost leadership strategy. The company operates with a warehouse store concept. The warehouse store concept focuses on offering large volumes of goods at low prices. A typical Costco warehouse has a relatively low number of SKUs available, and any given product is usually only available in a single SKU. Consumers are attracted to the low prices associated with volume buying. Each store has a set number of permanent items, with other items rotated through on a temporary or seasonal basis. This keeps the selection of goods relatively fresh for consumers.
Costco is able to achieve cost leadership through a number of different strategies. The first of these strategies is volume buying. Costco gets discounts over what other retailers get because of its ability to buy large quantities of any good. Thus, the company's size allows it efficiencies of scale in purchasing, distribution and sales…...

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Works Cited:

Costco 2009 Annual Report. Retrieved November 29, 2010 from http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MjQ1ODV8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1

MSN Moneycentral: Costco. (2010). Retrieved November 29, 2010 from  http://moneycentral.msn.com/detail/stock_quote?Symbol=cost&getquote=Get+Quote 

Bula, F. (2006). Downtown Costco an instant hit. Vancouver Sun. Retrieved November 29, 2010 from http://www.canada.com/vancouversun/news/westcoastnews/story.html?id=58a7c193-2c09-4d72-904f-c03f09cc1d55

Buyer power is high. Consumers are well informed and have a number of discount and warehouse options from which to choose. As such, there is a high risk of substitution or switching, lending the buyer high power on aggregate. There are high barriers to entry. Tremendous economies of scale are required in order to adequately compete in the low cost sector. Infrastructure buildout costs are high for any firm wishing to compete with Costco. Exit barriers are also high, due to fixed costs and the fact that most firms in the industry only operate in the warehouse or discount business. There is a high threat of substitutes from discount retailers and other low-cost retailers. The intensity of rivalry is moderate. With only three firms in the industry there is an inherent rivalry between the major players. However, strong growth in the market has reduced the intensity of the rivalry…...

The company's suppliers are one of the most important aspects of the microenvironment of any company, and Costco makes no exception. The company's suppliers can create a series of negative situations if they do not deliver the goods in time. This creates a chain of complaints that the company cannot resolve. Also, a good relationship between the company and its suppliers on the long-term can bring a series of benefits for the company.

Another important principle that Costco used when developing its general strategy is represented by the company's shareholders and their reward. Certain theories sustain that the shareholders are the most important part of the company and that the company's objectives must be oriented towards increasing the profits for these shareholders.

Costco Financial Position

The strategy was very successful for Costco, given the increased sales that followed. The company's sales evolution over the past five years was the following: $31,621 in 2000,…...

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Reference List

Thompson, Arthur (2009). Costco Wholesale Corporation: Mission, Business Model, and Strategy. The University of Alabama. Retrieved February 27, 2009.

Annual Report (2008). Costco. Retrieved February 27, 2009 at  http://media.corporate-ir.net/media_files/irol/83/83830/2008_AR_Cost.pdf .

Malone, Thomas (2006). Do Some Business Models Perform Better than Others? MIT Sloan School of Management. Retrieved February 27, 2009 at  http://papers.ssrn.com/sol3/papers.cfm?abstract_id=920667 .

Prasad, V. (2009). Introduction to Business Strategy. Social Science Research Network. Retrieved February 27, 2009 at  http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1324532 .

Costco is a mass market retailer, focusing on a "warehouse club" business model. The company has a cost leadership strategy and this helps to characterize the firm's financial statements In terms of the critical ratios, the following table outlines the results for Costco for the 2012 and 2011 fiscal years:
Costco Financial Metrics

Liquidity Ratios

Formula

Current Ratio

current assets / current liabilities

Quick Ratio

(current assets - inventory) / current liabilities

Activity Ratios

Receivables turnover

Sales / Avg Accounts Receivable

Inventory turnover

COGS / Avg inventory

Debt Ratios

Debt ratio

Total liabilities / total assets

Long-Term debt to equity

Long-term debt / total equity

Profitability

Gross Margin

Gross profit / Revenue

Net Margin

Net profit / Revenue

Market ratios

P/E

Stock price / earnings

Price / Book

Price / shareholder's equity

These ratios tell the story of Costco. There are a number of aspects to this. The liquidity ratios highlight the degree to which the company can meet its financial obligations for the upcoming period. Firms that are in retail tend to have significant spreads between their…...

Costco Wholesale Corporation (Costco) in India
Company overview

Costco Wholesale Corporation started operations in 1983 in Seattle, Washington. The company is essentially engaged with the operation of membership warehouses in Canada, United States, Mexico, Puerto ico, Canada, the United Kingdom, Japan, Australia, and via majority owned subsidiaries in Korea and Taiwan. The company's normal stock is trading on the NASDAQ Global Select Market under the image COST (Marchetti & oy, 2009).

The company is the fifth biggest retailer globally known for its warehouse club model, which could overtake Wal-Mart in its pursuit to establish footsteps in the developing markets. The Washington-based Corporation owns a global chain of over 504 warehouses accessible as national and local brands offering prices lower than traditional retail or wholesale outlets. It competes with the wholesale entity, Sam's Club owned by Wal-Mart in the U.S. (Kim & Mauborgne, 2010).

This study examines the present retail situation in India and assesses…...

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References

Kim, W.C., & Mauborgne, R. (2010). Blue ocean strategy: How to create uncontested market space and make the competition irrelevant. Boston, Mass: Harvard Business School Press.

Krugman, P. & Wells, R. (2013). Economics. New York, NY: Worth Publishers.

Madaan, K.V.S. (2009). Fundamentals of retailing. New Delhi: Tata McGraw Hill Education Private Limited.

Marchetti, J.A., & Roy, M. (2009). Opening markets for international trade in services: Countries and sectors in bilateral and WTO negotiations. Cambridge: Cambridge University Press.

Although not my firm, I see this in a company like Palm. Once dominant in its industry, the minute the industry dynamic shifted with the introduction of a new product and a new competitor (the shift to smartphones and the entrance of Apple), Palm was unable to adapt to compete. Blackberry management was able to adapt and that company has continued to enjoy a strong market position, while Palm has all but disappeared. hile this is an extreme example, it illustrates that there are few sources of sustainable competitive advantage, so leaders must be able to constantly find new ways for their firms to excel. This can sometimes imply significant changes to the business model, so the leader should not only be flexible but should be prepared to lead the organization through the process. The organization, therefore, should be responsive to the leader's demands for changes to company culture,…...

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Works Cited:

Boyle, M. (2006). Why Costco is so addictive. Fortune. Retrieved April 10, 2011 from  http://money.cnn.com/magazines/fortune/fortune_archive/2006/10/30/8391725/index.htm 

Yukl, G. & Lepsinger, R. (2002). Why flexible, adaptive leadership is essential for organizational effectiveness. Retrieved April 10, 2011 from www.oks.hio.no/ou/fagseminar/artikler/Yukl-Lepsinger.doc

Costco Corporation
Statement of Ethics

Our Mission is to offer our members quality goods and services at the lowest possible prices (Data monitor, 2011). In order to realize our mission, we will execute our business with the following Code of Ethics in mind:

Code of Ethics

Our code of ethics will focus on five critical elements:

Taking care of our members

Obeying the law

Taking care of our employees

especting our suppliers

ewarding our shareholders

The achievement of the first four elements will facilitate the ability of Costco to realize its ultimate goal in relation to ewarding Shareholders.

Obeying the Law

The law is the ultimate facilitator in the execution of the business operations (Wadhwa, 2009). Our business must operate in total compliance with the laws of every community and location thus the need to pledge to:

Adhere and comply to all laws and legal requirements

Uphold all public officials and their positions

Adhere to the safety as well as security standards for the products…...

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References

Thomas, T., Schermerhorn Jr., J.R., & Dienhart, J.W. (2004). Strategic leadership of ethical behavior in business. Academy Of Management Executive, 18(2), 56-66.

Wadhwa, V. (2009). Why Be an Ethical Company? They're Stronger and Last Longer.

Costco Takes Long-Term View. (2009). MMR, 26(13), 31.

Rafter, M.V. (2005). Welcome to the club. Workforce Management, 84(4), 40-46.

Costco has become a familiar name in homes across the country. Costco is a membership-based discount warehouse with a range of products including; food, clothing and electronics. Costco was created in 1983 by James D. Sinegal and Jeffrey H. Brotman. The main benefits associated with shopping at Costco include discount shopping and having the ability to buy in bulk. At Costco's members and their guest can purchase products that cost much less than products at regular retail outlets and grocery stores. The ability to buy in bulk is also a benefit being a member of Costco's. This is especially true for restaurants because they are able to purchase a large volume of products at a discounted price. Buying in bulk is also excellent for large households. (Zellner)
Costco is an excellent company for society and individual communities. Costco provides communities with jobs and low priced items. The purpose of this discussion…...

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Madison Heights:. Vol. 53, Iss. 4; pg. 38

Zellner Wendy. July 16, 2001. Warehouse Clubs: When the Going Gets Tough...:The slowdown hasn't slowed down Sam's Club and Costco

Business Week. New York:., Iss. 3741; pg. 60

Costco's mission can be resumed as the willingness to offer its members a large variety of good quality products at the lowest possible price
The very philosophy of the company is a clue that the top management practices a low-cost management which allows it to save on several fixed costs, such as office supply etc. For example, the fact that senior executives use furniture purchased from the oeing Company and used ever since Costco was created is notorious, but there are other examples in this sense: no public relations department, scarce use of the company jet and sparsely decorated warehouses

As we can see, the company's strategy, at least in terms of finance, is to keep costs as low as possible, so as to be able to compete with the other players on the market in terms of overall volume sold. In this sense, the company's strategy is a low price-high…...

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Bibliography

1. Costco asks Quebec government to rescind measures preventing a reduction of gas prices. On the Internet at http://www.canadanewswire.ca/en/releases/archive/January2005/27/c7664.html

2. Costco on the Wikipedia Encyclopedia. On the Internet at  http://en.wikipedia.org/wiki/Costco 

Costco asks Quebec government to rescind measures preventing a reduction of gas prices. On the Internet at http://www.canadanewswire.ca/en/releases/archive/January2005/27/c7664.html

Costco on the Wikipedia Encyclopedia. On the Internet at

S. Just like people, corporations can have biases and even forms of ethnocentrism inherent in their cultures, a prime example of this being WalMart (Hammond, Axelrod, 2006). Clearly further analysis is necessary to understand why Costco struggles in other regions of the world, yet the company's financial performance on a global level continues to be exceptional due to the factors cited earlier.
What is needed is for the company to concentrate on how to better understand the cultural dimensions of the nations they are operating in today and planning to sell into in the future. The Cultural Dimensions Model (Hofstede, 1998) would be an invaluable framework for the company to use in defining market entrance, market growth, and market strategy maintenance strategies throughout the individual country and region markets they hope to succeed in. The need for more of a focus on how their supply chains can scale into these other…...

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References

Boyle, D.. (2008, December). Costco Wholesale Corporation. Better Investing, 58(4), 31.

Costco, Investor Relations (2009, May 29). Costco Investor Relations. Retrieved July 28, 2009, from Costco Investor Relations SEC Filings Web site: http://phx.corporate-ir.net/phoenix.zhtml?c=83830&p=irol-sec

Chu, J., & Rockwood, K.. (2008, November). Thinking Outside The Big Box. Fast Company,(130), 128-130,132.

Alan M. Field (2006, February 20). Store brands take over. Journal of Commerce, p. 1.

Costco Organizational Theory and Behavior 1. What is Costco’s competitive advantage?
Costco is incessantly outperforming corporations such as Target and Wal-Mart. The company has reported great and impressive financial results from one financial quarter to the next whereas Target and Wal-Mart are dealing with a lull in business. All of this comes down to Costco’s competitive advantages. One of these competitive advantages is the focus on driving sales (Lutz, 2014). Whereas its rivals spend significant amounts in marketing, Costco does not go to great extents in advertising but rather retails a limited number of items. In spite of the company’s massive store volume, it has been renowned for selling a fraction of the brands in rival companies. The key competitive advantage in this lies in the fact that retailing fewer items leads to an increase in sales volumes and aids in driving discounts. Furthermore, Costco’s concentration on driving sales aids in elucidating…...

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References

Dyck, B., & Neubert, M. (2008). Management: Current practices and new directions. Cengage Learning.

Ingram, P. (2015). Use Costco\\\\'s supply chain best practices to save your business money. Retrieved 15 October, 2018 from:

Kline, D. B. (2017). What Is Costco\\\\'s Competitive Advantage? The Motley Fool. Retrieved 15 October, 2018 from: https://www.fool.com/investing/2017/03/17/what-is-costcos-competitive-advantage.aspx

Lutz, A. (2014). Costco\\\\'s Simple Strategy For Outperforming Wal-Mart And Target. Business Insider. Retrieved 15 October, 2018 from: https://www.businessinsider.com/costcos-simple-strategy-2014-9?IR=T

Young, J. (2017). Costco Wholesale’s Generic and Intensive Growth Strategies. Panmore Institute. Retrieved 15 October, 2018 from: http://panmore.com/costco-wholesale-generic-intensive-growth-strategies

Ethics Unwrapped. (2018). The Costco Model. Retrieved 15 October, 2018 from: https://ethicsunwrapped.utexas.edu/case-study/the-costco-model

https://www.investcalgaryregion.ca/blog/use-costcos-supply-chain-best-practices-to-save-your-business-money

Harvard Business Review has some of the best in-depth reviews of individual companies and may offer you some of the information that you seek about an individual Fortune 500 company’s culture.  You could start by looking at individual aspects of what is considered part of successful corporate culture and then look for articles or essays about those different facets of corporate culture, which could be a spring-board for an in-depth analysis.

If we were looking at a Fortune 500 company and wanted to find a source of an in-depth look at its corporate culture, we would search for....