Costco Case Analysis
Costco Case Analysis
Issaquah, Washington, is home to the top warehouse club and fourth-largest retailer in the nation. By offering ultra low prices, having a limited inventory, creating small profit margins, setting high ethical standards, and rewarding workers with top notch benefits and wages, Costco has become the number one membership warehouse in the world. Costco serves forty-eight million customers at any of their 488 locations spanning over eight countries. Their annual sales average fifty billion dollars. The backbone of Costco is their well motivated, hardworking, and greatly compensated 125,000 employees. James Sinegal and Jeffrey Brotman are the co-founders of the ...
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Brotman, was a lawyer and became Sinegal's business partner. Coincidentally, Costco and Price Club merged in 1993. It can be said that Sinegal went on to eclipse Sol Price in the art of getting the right product in the right place for the right price.
Costco's warehouse itself is a visual representation of what the company stands for. Bare concrete floors, fluorescent lights, and pallets of product stacked high to the ceiling, is what can be seen in the 150,000 square foot retail building. Throughout the stores, there are no signs or displays, but the large quantity of employees and even the self-checkout lanes, go against the Costco barebones mentality of reducing costs. Even though Costco may skimp when it comes to their structures, their merchandise is top of the line. They carry many high-end brand name products, including, Coach, Apple, Prada, and Dom PĂ©rignon Champagne. About a quarter of Costco's 4,000 items offered are of this luxurious nature. Costco has also ...
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stores up accordingly with downtown stores featuring urban-tailored products such as Louis Vuitton fashion goods, and ready-to-eat meals. Suburban customers generally come in to buy things like toilet paper and canned goods in bulk. Sinegal and the rest of the Costco hierarchy have abandoned the command-and-control mindset in favor of coaching, motivating, and empowerment. Lower level employees are expected to make decisions guided by the mission and values originally setup by Sinegal and the rest of the higher ups. Warehouse managers seem to have a large span of management because as the "CEO" they are in charge of their warehouse. However, due to the fact that Costco is ...
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Costco Case Analysis. (2014, April 15). Retrieved December 23, 2024, from http://www.essayworld.com/essays/Costco-Case-Analysis/103952
"Costco Case Analysis." Essayworld.com. Essayworld.com, 15 Apr. 2014. Web. 23 Dec. 2024. <http://www.essayworld.com/essays/Costco-Case-Analysis/103952>
"Costco Case Analysis." Essayworld.com. April 15, 2014. Accessed December 23, 2024. http://www.essayworld.com/essays/Costco-Case-Analysis/103952.
"Costco Case Analysis." Essayworld.com. April 15, 2014. Accessed December 23, 2024. http://www.essayworld.com/essays/Costco-Case-Analysis/103952.
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