This website uses cookies to ensure you have the best experience. Learn more

Business Analysis Part Iii: Costco Wholesale Corporation

2019 words - 9 pages

Business Analysis Part III: Costco Wholesale Corporation
June 14, 2012

Business Analysis Part III: Costco Wholesale Corporation
Jim Sinegal, Costco Wholesale cofounder and CEO summed up Costco Wholesale Corporations strategic planning and operations in a nutshell according to the Retail Industry website, “Wall Street is in the business of making money between now and next Tuesday. We’re in the business of building an organization, an institution that we hope will be here 50 years from the now. Strategic planning is an important part of running any business and the more so for businesses that operating in multiple states and countries.” On May 27, 2012, Costco Wholesale ...view middle of the document...

John Matthews, Costco Wholesale Corporation Senior Vice President of Human Resources and Risk Management has played an integral part in the corporation building its empire. This paper will further discuss how John Matthews has played an important role in the corporation achieving their business goals. A smart investor will do the necessary research and understand why it is a great idea to invest in Costco Wholesale Corporation.
In order to understand Costco Wholesale Corporations’ strategic initiatives, one must understand their strategies for pricing, product selection, what the company deem as “Treasure-Hunt Merchandising,” marketing and advertising, and the importance of website sales. Costco Wholesale Corporation strategic initiatives help them understand how they will adapt to organizational and operational changes in the market. These are important aspects that help the corporation consistently reach their goals. Through research, an investor will formulate a good idea in order to have a basic understanding of why it is a great choice to invest in this corporation. Lets’ take a look at Costco Wholesale Corporation strategic initiative of pricing to understand why competitors have such a hard time keeping up.
Costco Wholesale Corporation believes in low pricing of top-quality brands which attracts customers, “The company stocked only those items that could be priced at bargain levels and thus provide members with significant cost savings; this was true even if an item was often requested by customers” (Thompson, 2009). One of the key components of Costco Wholesale Corporation pricing factors is to limit their mark-up on brand-name merchandise at 14% which is a major difference from their competitors who mark-up their prices on brand names at about 20 to 50%. Brands such as their own “Kirkland Signature” are capped at 15%. The customer is consistently satisfied and the mark-up is so low, “that Wall Street analysts had criticized Costco management for going all out to please customers at the expense of increasing profits for shareholders” (Thompson, 2009). The strategic initiative of pricing has competitors adapting to Costco Wholesale Corporation organizational and operational procedures rather than the corporation adapting and trying to keep up with them.
Product selection is another strategic initiative that sets the corporation apart from the competitors in the same market. Competitors such as Wal-Mart may stock up to 40,000 items while places like Wal-Mart Supercenter or a Super Target may stock up to 150,000 items in order for the customer to have overwhelming selections to choose from. “Costco merchandising strategy was to provide members with a selection of only about 4,000 items” (Thompson, 2009). Without research, any investor would assume that this product strategy would put the corporation at a disadvantage. Through research, an investor would understand why this product put Costco Wholesale Corporation at a significant...

Other Papers Like Business Analysis Part Iii: Costco Wholesale Corporation

Hewlett Packard- Business Analysis Part 2

1894 words - 8 pages Hewlett Packard- Business Analysis Part 2 Dalia Alawami MGT/521 July 09, 2012 Ms. Sandra Griffin Hewlett Packard- Business Analysis Part 2 Introduction In order to take a decision of investing at any company it is important to determine the financial health of that company. Thence, it is mandatory to review some financial documents such income statement, balance sheet and cash flow statement, which help to get full image about the

Apple, Inc. Business Analysis Part 1 Swot

1769 words - 8 pages Business Analysis Part 1: Apple, Inc. Apple is a highly innovated business that entered the business world making computers back in the 1980s. They ventured out in the 2000s making non-PC devices and by the spring of 2010 had a market capitalization of $220 billion dollars. As a mutual fund manager, I have performed a SWOT analysis to determine whether or not to invest in this company. I will identify internal and external stakeholders

Analysis of Euthanasia Part III

2430 words - 10 pages As a continuation of an analysis of ethical dilemma about Euthanasia, our group Interviewed an administrator, a spiritual leader, a friend and a healthcare colleague about their Philosophy and worldviews of euthanasia utilizing eight specific questions as well as explaining and gathering reactions and opinions about two important, nationally-known cases involving Euthanasia. The controversial and ethical cases of Dax and Terry Schiavo were

Environmental Factors

1563 words - 7 pages ENVIRONMENTAL FACTORS your name Class Date Instructor ENVIRONMENTAL FACTORS Environmental Factors on Marketing Decisions of Costco Wholesale Corporation Environmental factors are made up of all the factors and activities that have a significant effect on managing a business. These factors have a strong influence on operating any business, particularly in marketing options (Pagell & Halperin, 2000). Environmental factors

Costco Wholesale 2012

1613 words - 7 pages COSTCO WHOLESALE IN 2012: MISSION, BUSINESS MODEL, AND STRATEGY Jim Senegal was a very effective CEO. He was able to take capitalize on the membership warehouse concept that he learned from Sol Price when he worked for Price club in the late 1970. In 1983, he developed a strategic mission and values “to continually provide our members with quality goods and services at the lowest prices possible”. This resulted in the first Costco being opened

Case Study 1

1164 words - 5 pages Case Study Analysis 1: Costco Wholesale Corp: Mission, Business Model and Strategy MGMT 670: Strategic Management Capstone June 26, 2011 Business Case Study: Costco Wholesale Corporation Introduction As a student in MGMT 670: Strategic Management, the capstone course for the Management track at the University of Maryland University College, I was asked to prepare a case study analysis of Costco Wholesale Corporation. Costco is one of the

Costco Strstegey

1749 words - 7 pages establishing stores rapidly across the world. But Costco is lacking in quantity of stores compared to Sam’s club. So, if Costco acquire BJ’s they will have two advantages  * They can increase the number of stores along with revenue and market share in the eastern part of USA. * They can eliminate BJ’s from rivalry permanently and concentrate only on Sam’s Club. iii. Performance Test:- As per my view Costco will be the leader in the whole

Costco Report 2012

4710 words - 19 pages the second year and rising to 9 percent after 25 years. ITS insurance plans cover the majority of dental expenses, and part-time employees are eligible for health insurance after just six months on the job, compared with two years at Wal-Mart. Eighty-five percent of Costco's workers have health insurance, compared with less than half at Wal-Mart and Target. S.W.O.T. Analysis; Strengths Costco Wholesale offers its customers and consumers its

Case Analysis

2016 words - 9 pages under the industry average, meaning that the company could benefit from adding value to its shareholders to match that of its competitors. Conclusion: After completing a financial analysis of Costco Wholesale Corporation through ratio analysis, it is confirmed in almost every respect that Costco is a leader in its industry. Costco is able to meet its short term liabilities better than its competitors and has a much larger inventory and asset

Competition Among the North American Warehouse Clubs

1977 words - 8 pages these three wholesale retailers. Another reason is because of the high barriers to entry prevent the threat of potential new entrants within the market. (Thompson, C55-73) Costco, Sam’s Club, and BJ Wholesale do have similar strategies because they all are concentrated on growth and development within the market. Each of the three companies’ strategy consists of the best-cost business strategy. Best-cost strategy is one of which offers top

Costco Strategic Choice and Evaluation

1138 words - 5 pages Strategic Choice and Evaluation Costco Wholesale Corporation (Costco) operates a membership-only warehouse that sells quality products and services at an affordable price. Costco remains an organization known for providing quality goods and services at the lowest possible prices (Costco, 2013). This paper evaluates Costco’s strategic choices and evaluates considerations for growth. The paper identifies the best value discipline, generic

Related Essays

Costco Wholesale Corporation: Mission, Business Model, And Strategy

663 words - 3 pages Costco Wholesale Corporation: Mission, Business Model, and Strategy Problem Identification a) There is an advertising problem b) For purchasing the products, membership cards are required c) In the warehouses, product locating is not successful d) North America has a major market for the sales e) Customer trends should consider Analysis of Problems a) Advertising 1) The advertising is not

Preparing To Conduct Business Research Part Iii

1198 words - 5 pages Preparing to Conduct Business Research Part III Your name Business Research/351 Research Problem and Purpose According to "United States Department Of Labor: Our Mission" (2012), they are designed “to foster, promote, and develop the welfare of the wage earners, job seekers, and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights

Business Analysis Part I

1124 words - 5 pages Business Analysis Part II En el siguiente ensayo se estará analizando los estados financieros de Costco Wholesale, en donde se evaluara y se resumirá la situación financiera de la misma. Se contestara sobre que se ha aprendido de la información financiera de la empresa, si existe alguna preocupación sobre la misma y como esta información le sirve a un gerente para seguir de manera competitiva en el mercado y la competencia. También se estará

Business Analysis Part Ii Mgt521

1560 words - 7 pages Business Analysis Part II MGT521 November 14, 2011 James Bingel Business Analysis Part II Introduction This paper will provide a review of Motorola Mobility Inc.'s (MMI) financial statements to determine the financial health of the company. MMI's financial health will be compared to that of Nokia and Research in Motion (RIM), two companies within the large-cap range ($5 - $50B). A benchmarking analysis will also be performed, using