Costco Wholesale

CASE 1: COSTCO WHOLESALE CORPORATION: MISSION, BUSINESS MODEL AND STRATEGY

Costco is a warehouse retail chain owned and operated by Jim Sinegal and Jeff Brotman. It is a membership club that first operated in 1983 in Seattle, WI. It is a successful merged company that is operated around many countries. (Thompson Jr, Pg 66). Costco uses its vision, mission and values in every part of its organization like any other company. Their values are similar to other retail chains. The company’s main categories of Vision and mission are products value and quality and lower prices for products. The two categories are divided into each other and the low cost criteria gives the customers an advantage of a better value and quality of products. (Thompson Jr, Pg 66). Other examples of vision/mission would be Jim Sinegal’s thought of selling a product for $10.1 and wondering about how to charge $10.50 or $11 for that product, Costco finds ways to sell its product for $8 when the current price of the product is $9 in all Costco stores. (Thompson Jr. Pg 68). They use a strategy of giving customers measures to provide lowest possible prices to its members by maintaining the quality as well. Costco uses a different markup on pricing compared to other retailers because of different strategies and they use 14% markup on cost. (Thompson Jr, Pg 66).

The mission of Costco and code of ethics states that they are obeying the law, taking care of employees, caring the members and they are the key to the success, maintaining good relationships with suppliers and respecting them and rewarding shareholders. (Thompson Jr, Pg 66-68). Costco offers lower price with a good strategy plan and they provide good customer service with a friendly manner. Ex: Target, Walmart, and other competitors of Costco have customers that have to select from over more than 200,000 products. However, Costco offers its members to select from over 4000 items from a few nationwide and private suppliers. Costco has a low...