Free «The Costco's Case» Essay

The Costco's Case

Costco is actually the dream shopping store in the modern world. A store that is a one stop shopping location for everything that individuals would want to find together at one place and with no hustles. Speak of jewelry, groceries, electronics and even commodities such as gas and you will find them all available at Costco. Further, these shopping items come with very huge discounts on almost everything. The warehouse is actually full of products, good services and very friendly people. In fact it makes every shopping experience in Costco worthwhile and one worth remembering.

Costco’s mission as per their website is to continually provide their members with quality goods and services at the lowest possible prices. In deed the warehouse has managed to observe this mission statement even in the wake of the major economic crunch that hit the world recently. It actually manages to achieve this goal through provision of a large collection of selected brands including their quality not to forget the competitive brand Kirkland. They also achieve customer satisfaction by buying from multiple suppliers in bulk which in turn allows them to get competitive bulk pricing discounts and they further pass these discounts to their members.

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It is also the competencies of Costco that assist in their quest to struggle hard for quality and low price services and products. Basically they have three core competencies which allow them to work with an approach of achieving their goal. The first is that they aim to carry the most exclusive selections of product categories that can be found under a single roof. This results to the provision of many different quality goods and services to their customers. Jim Sinegal says that they are able to achieve their core goal of achieving their goals of providing low priced commodities through the elimination of all the frills and costs associated with a wide range of retailers and wholesaler such as Wal-Mart and Sam’s Club. This frills as explained by the CEO are such as building a concrete box rather than a fancy building and also further includes letting their customers shop in a warehouse rather that a store with pretty flowers and shelves (Steven, 22).Costco is also able to maintain very low overhead costs and at the end passes these saving to their customers or members. The third core competency is relationships. Every fundamental thing about Costco is always focused on relationships they have with the surrounding communities, their workers, their suppliers and other stakeholders (Steven, 23).

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The business model for Costco is simple. As seen in (Thompson, A, & Gamble, 18) it provides consumers with the best products for the lowest prices than would normally be expected. The warehouse uses its different divisions such as the accounting, marketing, global division and even the customer care division to create their business mode. As the marketing division works to show both the customers and the suppliers on how the warehouse business works to their best interests, he accounting division works day in day out to keep the costs low for the products. This they do by ensuring that they set prices for the suppliers at their lowest while also transferring the same to their consumers. This means that the profit levels for Costco are maintained while keeping the image of quality and great prices positive for the consumers. On the other hand, the global division will always work to provide quality products that can be consumed by different countries. A good example is the Kirkland Signature brand of tissue paper which is also a top selling item across different countries.

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To conclude the success for this warehouse lies heavily on the success of the CEO- Jim Sinegal for his effective management. He puts all the essentials of management such as customer satisfaction and employee satisfaction to achieve this success. Wal-Mart. Sam’s Club and even BJ will have to work hard to achieve this king of success.

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