Costco Strengths And Weaknesses
Introduction
Costco is the fifth largest general retailer in the United States. Currently, it operated 608 warehouses, of which 439 are in the United States and the rest are in Puerto Rico, Canada, Mexico, UK, Japan, Taiwan, Korea and Australia. They also have an online business as well as, Costco Travel to complement their warehouse operations.
Costco actually focuses on selling their products to customers as a lower They gain an estimate of over $70 billion USD (2008) are generated through a workforce of approximately 142,000 employees. Costco focuses on selling products at low prices, often at very high volume. These goods are usually bulk‐packaged and marketed primarily to large families and businesses
shoppers pay a membership …show more content…
Costco’s top three strengths include firm infrastructure, HRM, and Support Services. Costco’s major weakness is consistently low operating profit margins. Costco maintains operational effectiveness and better positioning than industry averages. Costco receives cost advantages from business (value adding) activities, and focuses to differentiate core competencies (skills) successfully outperforming competitor’s capabilities and achieving higher than industry averages across business activities. Costco lacks significant strategic innovations, and continues to follow down the inevitable path of coping and competing with Wal-Mart and Target, whom do not require a membership fee to shop for great deals, and offer the shopper enhanced …show more content…
Since the employees in Costco are paid well and have good benefits they actually work harder and feel proud to work in Costco, due to their ex CEO, Jim Sinegal who has since retired. He inculcated the value system that if you provide good jobs and good wages and a career, good things would happen. This is true in Costco’s case as it does have the lowest theft rate and lowest turnover rate of its employees as compared to other competitors. Due to these, the staff are extremely skilled in the Costco’s services and provide good customer services as well and these can definitely not be imitated easily by Costco’s competitors since the human resource of a firm can never be imitated, especially if the staff are incredibly loyal to the company that they rather even retire in Costco. The current CEO Craig Jelinek also follows in Jim Senegal’s footsteps and runs Costco with the same value system and pays the employees good wages making their human resource management strategy a unique one that is still able to be sustained.
However, a problem would arise maybe a few years down the road if a recession occurs or there are economical problems that lead Costco to want to reduce the wages and benefits of the employees and this might be a problem for their productivity and also for their turnover rates and company morale. Its sustainability could be
Costco is the fifth largest general retailer in the United States. Currently, it operated 608 warehouses, of which 439 are in the United States and the rest are in Puerto Rico, Canada, Mexico, UK, Japan, Taiwan, Korea and Australia. They also have an online business as well as, Costco Travel to complement their warehouse operations.
Costco actually focuses on selling their products to customers as a lower They gain an estimate of over $70 billion USD (2008) are generated through a workforce of approximately 142,000 employees. Costco focuses on selling products at low prices, often at very high volume. These goods are usually bulk‐packaged and marketed primarily to large families and businesses
shoppers pay a membership …show more content…
Costco’s top three strengths include firm infrastructure, HRM, and Support Services. Costco’s major weakness is consistently low operating profit margins. Costco maintains operational effectiveness and better positioning than industry averages. Costco receives cost advantages from business (value adding) activities, and focuses to differentiate core competencies (skills) successfully outperforming competitor’s capabilities and achieving higher than industry averages across business activities. Costco lacks significant strategic innovations, and continues to follow down the inevitable path of coping and competing with Wal-Mart and Target, whom do not require a membership fee to shop for great deals, and offer the shopper enhanced …show more content…
Since the employees in Costco are paid well and have good benefits they actually work harder and feel proud to work in Costco, due to their ex CEO, Jim Sinegal who has since retired. He inculcated the value system that if you provide good jobs and good wages and a career, good things would happen. This is true in Costco’s case as it does have the lowest theft rate and lowest turnover rate of its employees as compared to other competitors. Due to these, the staff are extremely skilled in the Costco’s services and provide good customer services as well and these can definitely not be imitated easily by Costco’s competitors since the human resource of a firm can never be imitated, especially if the staff are incredibly loyal to the company that they rather even retire in Costco. The current CEO Craig Jelinek also follows in Jim Senegal’s footsteps and runs Costco with the same value system and pays the employees good wages making their human resource management strategy a unique one that is still able to be sustained.
However, a problem would arise maybe a few years down the road if a recession occurs or there are economical problems that lead Costco to want to reduce the wages and benefits of the employees and this might be a problem for their productivity and also for their turnover rates and company morale. Its sustainability could be