What attracted us to Costco was that it has a strong membership group, which translates into loyal shoppers. The company also has a strong brand that customers know and feel like they get great value at a low price. Continually growing in net sales and net income despite a very competitive market. Our idea that attracts us to Costco is what they don’t have and are not known for is smaller stores that still give customers great value in smaller packs along with customer service which Costco is not known for. In regards to customer service we feel there is nowhere to go but up and we feel Costco has the financial means to build these stores and create a simple service program that customers will recognize immediately versus their …show more content…
Costco excels by having fewer choices to choose from and focusing on volume translating into lower prices for customers. Costco supply chain efficiency is industry leading. An integral component of Costco’s supply chain efficiency is the cross-dock distribution (depot) facility. Meaning that Costco purchases straight from the manufacturer and then has the merchandise transported to a cross-dock warehouse that will then truck to the stores. In addition Costco believes in paying its employees a higher wage because that equals happier employees who take their work seriously. Higher wages also mean that Costco will employ a higher quality employee from the preexisting pool of candidates that retail chains compete …show more content…
They do not have as many stores meaning that the average store approximately receives 100 million dollars a year in sales. Costco focuses on selling in bulks with larger sized quantities and focuses less on everyday goods. Doing this means they are able to increase the volume of particular items and keep prices low. In addition, Costco has perfected a purchasing strategy known as the “treasure hunt” which refers to new incoming items and deals that spontaneously come and
Do you like shopping? Both Costco and Sam’s Club are very popular stores. They are both in the top ten biggest retailers in the world. They bring in a ton of money to the people that own them. They are both Warehouse Clubs, which means they are massive stores that require a membership to enter.
Costco and Sam's Club Introduction There are so many stores where people can get their groceries and basic needs. Where do you get your groceries from? Out of all the stores Costco and Sam's Club are the mainstream ones with a variety of products. Costco and Sam's Club share many similarities and differences when it comes to their membership, environment/food court, and customer service/experience. Membership Costco and Sam's Club both offer memberships and to shop in the stores or online you must have a membership.
Costco gives their employees health care, dental care, a pharmacy program, care network and much more. Sam’s Club also provides their workers with similar benefits; however, they do not provide as much benefits as Costco does. “The workers at Costco only pay about 12 percent of their premiums out-of-pocket, while the Sam’s Club workers pay over 40 percent.” (Slate) Costco employees are also paid better and are loyal to their work place. Like mentioned in the introduction, workers start their pay at $11.50 an hour and then makes $21 an hour after four and a half years.
It has many inflows of profit from all of its stores that it can rely on. Currently, Costco is way ahead of its competitors globally. BJ 's Wholesale and Sam’s Club are its two main competitors. However, BJ 's Wholesale does not operate any stores outside of the United States; and Sam 's Club, which is owned by Wal-Mart, only has stores in three foreign countries (Costco’s
They offer their private label Kirkland Signature brand, as well as, a large selection of name brand merchandise. Costco is always looking to add new brands to their product line. “They experienced a impressive 18.52% return on equity in 2014. Sales exceeded $110 billion, and net income totaled $2.06 billion, or $4.65 per share. Our cash flow was strong; and over $900 million was returned to shareholders in the form of dividends ($584 million) and share repurchases ($334 million)”, (Costco Wholesale Return on Equity (TTM) (COST), 2015).
By the way Costco is where I do 85% of my grocery shopping, because when I go grocery shopping its for 2-3 weeks at a time, so buying in bulk is great for my household. Dinner: I will be honest and I have not eaten dinner yet tonight. I am so undecided of what I want to have. I have had a banana tonight so far. I am thinking that I will have a turkey burger tonight.
Exclusivity to members: As we all know, Costco are the membership system. This system allows exclusivity to members, and exclude other shoppers. It restricts the shoppers shop easily. Even there are more than 81.3 million cardholders, not everyone has the cards. For example, there are many tour groups come to California, especially Chinese tour groups.
Costco has the opportunity to make developments on its private brand, Signature Kirkland brand. Adding more products and the commitment to quality is precious to the business. The Costco warehouse carries over 4000 SKU items which are minimal to grocery stores carrying over 30,000 (Caplinger, D. 2016). Costco has a limited selection of products that contributes to keep the cost low, and aiding in extensive savings onto the customers. Implementing a merger or expanding in new developing locations internationally, such as Mexico, that has a stable political structure and tax exemptions, will increase revenue.
Walmart asks suppliers to offer their products at very low prices and most suppliers comply. Otherwise, Walmart would not sell their products. Knowledge-based Capital The premise that price drives sales volume has been core to the Walmart’s productivity loop. As it repeats and whips, the inputs grow in multiples and in exponential terms than mere addition.
They have done so by consistently outperforming other “industry giants” like Walmart and Target by providing high-quality products to customers at lower prices. They maximized the return on a number of factors such as pricing, store layout and design, store locations, advertising and marketing philosophies and more. According to Jim Sinegal, in the end, it boils down to just treating people right and providing a consistently good quality product at an affordable price. Because of their ability to make the best use of these key factors, they have built themselves into a successful company with a global
It has a large network of business through the US and many other regions. These procedures are large scale procedures which occasionally delays the implementations of changes to bottom levels. It has huge stores for already aged markets in the US. Secondly, Costco does little or no proper advertising that means that the corporation is not receiving customers that it should have receive. Costco has very limited emphasis on its stores and the areas it covers.
Abstract Motivation is the process through which people are stimulated to increase their actions and performances to accomplish the set goals for an organization or a company. Costco, a retail store created a culture that motivates its employee to keep coming back to work. The stimulating key factors for Costco employees are desire for getting more pay, opportunities for promotion, ability to be treated with respect by the headship of the company as family, and recognition by the customers to provide good customer service at low price. This paper has not only discussed the strongest motivational factors for Costco employee, but it equally suggested another motivational system that can allow employees to select their valued benefits from a list
Key Trends – Globalisation One of the main opportunities Costco has is more global expansion to specific targeted countries. Although operating in many countries, Costco is heavily dependent on the U.S. and Canadian markets. It still has the opportunity to expand into the Asian and Australian markets where it has a limited presence. Costco has the capability to operate about 100 stores in Taiwan, Korea and Japan combined and about 20 stores in Australia. It currently has 41 stores in Taiwan, Korea and Japan combined and 6 stores in Australia.
Wal-Mart 2. Stores Sam Club 3. BJ wholesale • COMPETITIVE STRENGTH- ADVANTAGES • Costco right now has a slim competitive advantage over some competitors • Pricing–Costco philosophy was to keep customers coming in to shop by wowing them with low prices • Product-Costco merchandising range of 3,600 of broad spectrum • Low cost emphasis-Keeping operating cost at a bare minimum was a major element of Costco’s strategy a key to its low pricing • With over 30% of members having annual incomes of 100,000 or more • They have a great buying market relationship with many producers of the national brand • Costco volume ran about $4 million to $7million a week • CONCLUSIONS DRAWN FROM ANALYSIS • Offer low prices to attract members and provide them with considerable cost saving • Household and business can switch, switching costs are low • Costco must Obey the law to conduct the business in total compliance with the laws of every community • Costco membership is open to business owners as well as to individuals.
Distribution centers are the foundation of a supply network. They supply products to many of their stores, helping to stock a variety of products that certain stores are not selling. Instead of sending them straight to the store, the distribution center can stock many different products and send them the stores that are successful with that specific product to increase sells and eliminate losses. Another interesting fact is that while distribution centers are a huge factor in success and profit of a company, they can only lose money. Their main objective is the storage to always have products the guests want on hand, meanwhile not overloading the stores.