Costco Wholesale In 2012
CASE 2: COSTCO WHOLESALE IN 2012: MISSION, BUSINESS MODEL, AND STRATEGY.
Costco was founded by Jim Sinegal and Jeff Brotman. The first Costco store began operations in Seattle in 1983. In December 1985, Costco became a public Company. In August
1999, the name was changed to Costco Wholesale Corporation.
The Strategy-Making and Strategy-Executing Process in Costco:
1.
Developing a strategic vision, mission, and core values:
Mission: to continually provide our members with quality goods and services at the lowest prices possible”.
Costco’s core values based on these principles:
a. Obey the law, because the law is irrefutable
b. Take care of our members, because members are Costco’s reason for being who is the key to Costco’s success.
c. Take care of our employees, as the most important asset, be provided with rewarding challenges and opportunities for personal and career growth.
d. Respect our suppliers, as business partners
e. Reward our shareholders, by providing them with a good return on the money they invest in Costco.
2.
Setting objectives: high sales volumes and rapid inventory turnover.
Due to the high sales volume and rapid inventory turnover, the accelerated cash conversion cycle permitted Costco to collect the funds for inventory prior to vendor payables becoming due. This provided for vendor financing and the ability to take advantage of early payments discounts which finally reduced operating costs.
3.
Crafting strategies
a. Become a low cost provider by cost-saving strategies in its production, operations, marketing and advertising.
b. Providing top-quality merchandise
c. Providing treasure-hunt items
d. Creating private label : Kirkland Signature
e. Expanding domestically and internationally
f. Cross-docking distribution
g. Membership warehouse concept.
h. Giving the good benefit package and promoting from within as a HR strategy.
i.
Environmental sustainability
4.
Executing the strategies
5.
Monitoring developments, evaluating
Costco was founded by Jim Sinegal and Jeff Brotman. The first Costco store began operations in Seattle in 1983. In December 1985, Costco became a public Company. In August
1999, the name was changed to Costco Wholesale Corporation.
The Strategy-Making and Strategy-Executing Process in Costco:
1.
Developing a strategic vision, mission, and core values:
Mission: to continually provide our members with quality goods and services at the lowest prices possible”.
Costco’s core values based on these principles:
a. Obey the law, because the law is irrefutable
b. Take care of our members, because members are Costco’s reason for being who is the key to Costco’s success.
c. Take care of our employees, as the most important asset, be provided with rewarding challenges and opportunities for personal and career growth.
d. Respect our suppliers, as business partners
e. Reward our shareholders, by providing them with a good return on the money they invest in Costco.
2.
Setting objectives: high sales volumes and rapid inventory turnover.
Due to the high sales volume and rapid inventory turnover, the accelerated cash conversion cycle permitted Costco to collect the funds for inventory prior to vendor payables becoming due. This provided for vendor financing and the ability to take advantage of early payments discounts which finally reduced operating costs.
3.
Crafting strategies
a. Become a low cost provider by cost-saving strategies in its production, operations, marketing and advertising.
b. Providing top-quality merchandise
c. Providing treasure-hunt items
d. Creating private label : Kirkland Signature
e. Expanding domestically and internationally
f. Cross-docking distribution
g. Membership warehouse concept.
h. Giving the good benefit package and promoting from within as a HR strategy.
i.
Environmental sustainability
4.
Executing the strategies
5.
Monitoring developments, evaluating