Costco

Mission Statement: The highest quality of goods and services to market at the lowest possible prices while providing excellent customer service and adhering to a strict code of ethics that include taking care of our employees and members, respecting our suppliers, rewarding our shareholders, and seeking to be responsible corporate citizens and environmental stewards in our operations around the world.

January 2012

598 Warehouses in 40 states and Puerto Rico, the UK, Korea, Taiwan, Japan, Australia, and Mexico.

Total Revenues of $88.9 billion in the fiscal year of 2011

25 million households and 6.4 million businesses have a membership with Costco

This asset helped generate a total of $1.9 billion in membership fees for the comp.

The annual sales for each store averaged around $146 million.

Business Model:

Membership fees, high inventory turnover and rapid revenues are a major part of the business model.

Costco can expect high revenues because of low prices and customer loyalty

Once the company reaches a certain amount of member fees it breaks even so there is added revenue.

Larger amounts from merchandising vendors at lower cost

Jim Sinegal Report Card:

A+ as CEO, A+ on strategy, A+ on strategy execution

Strategy and Execution

Focuses on low pricing, limited selection of nationally branded and private label products, a “treasure hunt” shopping environment, strong emphasis on low operating costs, and geographic expansion.

Core values and Code of Ethics

Obey the law, Take care of our members, take care of our employees, respect our vendors. If we do these four things throughout our organization, then we will realize our ultimate goal, which is to reward our shareholders.

Competitive Factors and Advantages

Price, Merchandise, Quality and Selection. Low prices is the biggest factor

Competitive Advantage in its business model and strategy is going well.

More locations, customer loyalty, and quality items add to increased membership fees...