Liberty University - BUSI 690 Individual Case Study 1 - Costco(SOLVED CASE)

INDIVIDUAL CASE STUDY 1 - COSTCO2Individual Case Study 1 – CostcoExecutive SummaryCostco is the world’s largest membership warehouse club and a multi-billion dollar global retailer with a physical presence in 8 countries ...

INDIVIDUAL CASE STUDY 1 - COSTCO2Individual Case Study 1 – CostcoExecutive SummaryCostco is the world’s largest membership warehouse club and a multi-billion dollar global retailer with a physical presence in 8 countries. As of March 2019, Costco owns and operates a total of 770 warehouses worldwide. Its strategy and dedication is focused on a cost leadership business plan that provides its membership-paying customer access to top-quality goods and services at the lowest possible prices. Mission, Objectives, and StrategiesThe mission statement for Costco, as provided by its top three executives – Jeff Brotman, Jim Sinegal, and Craig Jelinek in 2011 stated:The company will continue to pursue its mission of bringing the highest quality goods and services to market at the lowest possible prices while providing excellent customer service and adhering to a strict code of ethics that includes 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. [CITATION Cos \p 3 \l 1033 ].This mission statement captures the essence of Costco’s business goals along with the philosophies underlying them. It also delivers pure and precise direction to the overall business practices of Costco, therefore, providing a clear vision to its employees, customers, suppliers, and to the community. In addition to its existing mission statement, Costco has addressed the global sustainability efforts and has incorporated its new environmental sustainability fit and states: INDIVIDUAL CASE STUDY 1 - COSTCO3Sustainability to us is remaining a profitable business while doing the right thing. We are committed to lessening our environmental impact, decreasing our carbon footprint, sourcing our products responsibly, and working with our suppliers, manufacturers, and farmers to preserve natural resources. This will remain at the forefront of our business practices. [CITATION Cos171 \p 5 \l 1033 ].As Costco continues to lead by example in the retail industry, its corporate leadership and the culture they have established has helped to maintain and increase its competitive advantage over its competition. Costco’s objective remains to provide the highest quality of products at the lowest possible price along with treating everyone in its business circle with respect.Costco utilizes the strategy of cost leadership within its business plan while also implementing the membership club business model in order to differentiate itself from its competition. To maintain its competitive advantage, Costco also uses a no-frills approach with its warehouses and advertising except its monthly coupon flyer and its Costco Connectionmagazine. Another strategic element for its plan is to sell a limited number of items, roughly 3,800 items, priced at reduced levels as selling limited items drive sales volume and enable deeper discounts. Costco’s desire is to be recognized by its consumers and competitors as high quality, low priced items that can be purchased in bulk to drive stronger discounts. The business model that Costco employs makes its value proposition unique and extremely compelling. Its high inventory turnover is critical with its strategic plan as it allows Costco to leverage its tight margins items, such as gasoline and pharmacy, to drive customers into its warehouses. Costco has strong partnerships with suppliers and can negotiate with them for the best deals, even when inflation rises because brands trust Costco will use the cost savings to keep price tags in stores down [ CITATION Nat183 \l 1033 ]. Through Costco’s strategic plan of cost leadership, its