...Overview: Costco was founded by Jim Sinegal and Jeffrey Brotman. Costco opened its first warehouse in Seattle, Washington, on September 15, 1983. Siegal had started in wholesale distribution by working for Sol Price at both FedMart and Price Club. In 1993, Costco merged with Price Club. Costco’s business model and size were similar to those of Price Club. In 1997, PriceCostco changed their name to Costco Wholesale and all the Price Club locations were rebranded to Costco. Costco was the first company in the industry to grow from zero to $3 billion in sales in less than six years. Costco use the competitive strategy the best-cost provider in the wholesale club membership category. Costco has the purchasing power, high sales volumes, quick inventory turnover, and excellent customer service. The chief elements of Costco strategy are pricing, limited product selection and what the company calls “treasure-hunt merchandising, this is high end product that is acquired in the gray market from other wholesalers or distressed retailers looking to get rid of excess or slow-selling inventory. 1. What is Costco’s business model? Is the company’s business model appealing? Why or why not? The business model that Costco employs is that they are able to provide quality goods and services at the lowest possible prices. This business model is appealing as it firstly, allows Costco to generate high sales volume and rapid inventory turnover by offering members very low prices and select private-label...
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...management workforce has a reputation for being the most productive and loyal in all of retail. A winning retail strategy, flexible ... Which of the three management-skill categories do you think Costco CEO James Sinegal draws upon most during his year-round visits to local Costco warehouses? Explain. 2. What aspects of Costco's ... Management - Google Books Result https://books.google.com/books?isbn=0324537700 Richard Daft - 2007 - Business & Economics workforce has a reputation for being the most productive and loyal in all of retail. A winning retail strategy, flexible ... Which of the three management-skill categories do you think Costco CEO James Sinegal draws upon most during his year-round visits to local Costco warehouses? Explain. 2. What aspects of Costco's ... Costco Wholesale Corporation - Essays - Mastan www.termpaperwarehouse.com › Business and Management * Sep 7, 2013 - Read this essay on Costco Wholesale Corporation . Come browse our large digital ... Which of the three management-skill categories do you think Costco CEO James Sinegal draws upon most during his year-round visits to local Costco warehouses? Explain. Team building; Managing warehouses like ... What Costco CEO James Sinegal Can Teach You About ... www.openforum.com/.../what-costco-ceo-james-sinegal-ca... * * OPEN Forum With a 12 percent turnover rate over three decades, every business...
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...driving vision for Costco still dominates and it is all about conceiving that small company feeling and he did this by creating value from within. Of course for Sinegal, creating value from within meant taking good care of Costco's 160,000 employees, which is explicitly stated in the vision statement. One way Sinegal was able to do this was by fashioning a corporate culture that established a more proactive and effective management that catered directly to the needs of Costco's employees. Sinegal made it a company-wide policy to get management to be deeply involved with Costco's employees in many different ways, this primarily included eliminating physical structures and keeping the work place open so there are no barriers between management and employees. This translated into management, including top-management, actually walking through the stores helping employees with routine tasks or by personally answering phone calls and addressing the concerns of customers; management did not spend their time confined to some office that is only accessible to a few. Sinegal himself took part in these kinds of activities; he was not at all a typical CEO. Sinegal was so involved and devoted to being at his employees' side that he even could be mistaken for a regular employee at a warehouse because he dressed casually and wore a name tag that simply said "Jim" making him look indistinguishable from the average stock clerk when he used to conduct routine daily visits to Costco locations throughout...
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...case below and answer the questions asked. Case 1: 7.5% Costco Wholesale Corporation 1. Which of the three management-skill categories do you think Costco CEO James Sinegal draws upon most during his year-round visits to local Costco warehouses? Explain. Team building; Managing warehouses like Costco require an organization that is flat, fast, and flexible. Sinegal focuses in on customer and employee needs and wants which gives an understanding of behaviors and attitudes. This abandons the hierarchy of command-and-control mindset while replacing it with coaching, motivation, and empowerment. When Jim travels to Costco warehouses around the world (he tries to visit each location at least once a year), he knows the names of an unusual number of employees, from store managers to forklift drivers. “He is amazingly in tune with the employees who work for him.” It speaks to Jim’s management style: He has always been an in-the-trenches CEO, acknowledging that employees are a key part of meeting the company’s goals. One principle that he continuously stresses to his managers is “If you’re not spending 90 percent of your time teaching, you’re not doing your job.” The foundation that Jim has brought to the company as far as his compassion and to really do what is best and to give back, not just to the employees but to the community, is something that is instilled in everybody here,” she says. “Working for Costco, you see how important that is and what a difference that...
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...states, Puerto Rico, Canada, the UK, Taiwan, Japan, Korea and Mexico. Its annual sales per store averaged $130 million whereas it’s closest competition; Sam’s club averaged $75 million per store. (p. C32-C33) 2. What are the chief elements of Costco’s strategy? How good is the strategy? The chief elements of Costco’s strategy are low prices, a limited product line and limited selection, and a “treasure hunt” shopping environment (p. C-35). The company’s strategy is appealing because they entice with low prices to attract more customers. Similarly the company is also based on the limited product or product selection as more products mean more confusion for the customer. This technique helps to create a good relationship with its suppliers. The strategy contains all of the criteria to make Costco one of the successful companies today. 3. Do you think Jim Sinegal is an effective CEO? What grades would you give him in leading the process of crafting and executing Costco’s strategy? What support can you offer for these grades?...
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...BUSI 1002-1 March 8, 2015 Craig Jelinek's personality Craig Jelinek has been with Costco team since 1984, and he has done various jobs in those years. He is dedicated to Costco and what the company represents. He became the President of Costco in 2012. If something works don’t change it as in the $1.50 Costco hot dog deal. He worked with the previous President Jim Sinegal and learned about business management from him. Jelinek’s knows Costco culture and what has worked with its employees and customers. He helps his employees to grow and succeed. He is dedicated to better benefits and salaries for his employees, but also has the same commitment to the customers. Terminal and instrumental values that are important to Craig Jelinek as a manager. Terminal and instrumental values that are likely important to Craig Jelinek would be happiness, self-respect recognition, honesty, sincerity, and ambition. The reasons why I would say these things is because for Jelinek’s to be successful with his employees and customers he would have to be these things. If the employees and customers are not happy then the financial report for Costco would show this. Costco’s organizational culture Costco culture was first started by Jim Sinegal in which the culture has no divisions because leaders and employees are on the same page when it comes to their customers and what makes Costco work. Costco invests in their employees and wants them to be satisfied and engaged in their jobs. Employees...
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...In September of 1983, Costco Wholesale Corporation began operations in Seattle, Washington. The company was founded by James Sinegal, current President and CEO of Costco, and Jeffrey Brotman, Chairman of the Board of Directors. In October of 1993 Costco merged with a Delaware company called The Price Company to form Price/Costco, Inc. The price company was the first to establish the concept of a membership warehouse. In 1999, the company changed its name to Costco Whole sale Corporation and moved themselves back to Washington. Costco is currently one of the largest retail stores in the industry, it operates 335 warehouses throughout the United States, Canada, Mexico, England , Scotland , Japan, Taiwan and Korea. Costco now employees a staff of approximately 2,000 at it’s Home Office in Issaquah , Washington, and counts nearly 80,000 employees worldwide. Costco is a mission driven company, and their mission is to continually provide our members with quality goods and services at the lowest possible prices.(Costco.com) In order to achieve their mission , Costco conducts business with the following Code of Ethics : obey law, they have to take care of their costumers, take care of their employees. As James Sinegal said “ And if we do those things, we think that we will reward our share holders” (abcnews.go.com) And to reward the shareholder is ultimate goal of Costco. Costco conducts business in total compliance with the laws of every community where they do business. They comply...
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...1-6] Costco CEO Craig Jelinek Leads the Cheapest, Happiest Company in the World Joe Carcello has a great job. The 59-year-old has an annual salary of $52,700, gets five weeks of vacation a year, and is looking forward to retiring on the sizable nest egg in his 401(k), which his employer augments with matching funds. After 26 years at his company, he's not worried about layoffs. In 2009, as the recession deepened, his bosses handed out raises. “I'm just grateful to come here to work every day,” he says. This wouldn't be remarkable except that Carcello works in retail, one of the stingiest industries in America, with some of the most dissatisfied workers. On May 29, Wal-Mart Stores (WMT) employees in Miami, Boston, and the San Francisco Bay Area began a weeklong strike. (A Walmart spokesman told MSNBC the strike was a “publicity stunt.”) Workers at an Amazon.com (AMZN) fulfillment center in Leipzig, Germany, also recently held strikes to demand higher pay and better benefits. (An Amazon spokesman says its employees earn more than the average warehouse worker.) In its 30-year history, Carcello's employer, Costco, has never had significant labor troubles. Costco Wholesale (COST), the second-largest retailer in the U.S. behind Walmart, is an anomaly in an age marked by turmoil and downsizing. Known for its $55-a-year membership fee and its massive, austere warehouses stocked floor to ceiling with indulgent portions of everything from tilapia to toilet paper, Costco has thrived...
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...310 Intermediate Microeconomics Costco; Your Local Friend Lawrence Lam Cal State Fullerton Superstores such as Wal-Mart, Target, and Home Depot have always been frowned upon by local businesses because of the competition it brings. Lower prices forces nearby stores to lower their prices until they shut down because of the negative profits from lowering their prices or because they don't acquire enough revenue to stay in the market. However ironically this feeling isn't shared towards the opening of Costco, another wholesale superstore. Costco's lower prices surprisingly causes local businesses to raise their prices. Even to the point where investors find area's relatively close to Costco to be an ideal location to start and open their own business. (Ann Arbor News) There are many differences between the way Wal-Mart and Costco works and what they provide to the community. To begin we will illustrate some benefits of Costco' entrance into a local town that is commonly known. As a wholesale store, Costco generates employees, from cashiers, stock associates, butchers, up to manager positions which provides job opportunities to the local area. In Pittsfield, the newly arrived Costco hired 180 employees out of the 1000 applicants, most which were locals. (annarbor) Costco indeed provides items at a cheaper price for the customers. This even applies to the top of the line brand's such as Sony, Samsung, Toshiba and more. Costco provides Kirkland brand items, an...
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...Costco Wholesale Case Analysis Management 370-3 Dr. Xu December 7, 2014 The Costco warehouse club has been in business since 1970. Founded by James Sinegal and Jeffrey Brotman. Costco has become the number one warehouse store in the world. With over 488 locations and serving 48 million cardholders in eight countries. The warehouse club keeps growing and has become a successful warehouse club. The founders created guide lines to follow to achieve their goals as an organization. Obeying the law,take care of its customers, take care of employees, respect its suppliers and reward their shareholders. The Costco Organization strongly believes that taking care of their employees and providing them a generous pay is Costco’s key to success. Costco holds nearly one hundred and twenty-five thousand highly motivated employees. It is know that Costco’s employees are one of the best paid and happy employees in the retail business. The warehouse club has become the consumers place to go to, where they will find high quality products at rock bottom prices. Moreover, the issue that Costco is facing is the continuous expansion of their warehouses globally and paying their employees more than the average salary for warehouse employees. Costco’s employees are rewarded with very generous wages, bonuses and healthcare benefits. The employees salary is about forty two percent higher than competing retail stores. This could affect the organization in the long rung. Even...
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...Management and Leadership: Costco Wholesale MGT 330 March 21, 2011 Management and Leadership: Costco Wholesale Costco Wholesale is a company in the membership wholesale business. Costco Wholesale, or just Costco as the members refer to them, has 565 locations in 40 of the 50 states and Australia, Canada, Japan, Mexico, Puerto Rico, South Korea, Taiwan, and the United Kingdom (Hoovers, 2011). Costco has 56 million card members who purchase memberships to shop there and obtain name brand products at the lowest prices. Costco sells everything from aspirin to caskets to wedding dresses. Costco Wholesale also has a very popular online store. Costco Wholesale is ranked number 25 in Fortune Magazines Fortune 500 (Fortune, 2011) Difference between Managing and Leading Costco is a company who strives to train their management staff into not only productive managers but also superior leaders. Costco warehouse employees train mainly with hands-on training by other employees and managers in the same department. For example, the Front End is a department where the members check out their items. On the Front End are packers, cashiers, supervisors, one assistant manager, and a manager of the Front End. When a new employee begins training as a cashier, another employee will train the new employee. The trainer will lead this new employee to make good decisions versus bad and lead him or her to do the best at his or her job. The Front End also has supervisors...
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... 1936 in Pittsburgh, Pennsylvania. He earned his AA at San Diego City College and his BA at San Diego State University. Jim Sinegal started out as a bagger at FedMart and worked his way up the ladder. He became Vice-President of Merchandising and Operations at FedMart. He also held several executive positions within other companies up until 1983. Having held several executive positions, what Jim Sinegal is most known for is that in 1983 he co-founded Costco and was the president and CEO until he retired in January 2012. As CEO, Jim Sinegal believed in taking care of his employees. He also believed in treating his customers just as good as he did his employees. It was said that he was far more interested in keeping them happy rather than the shareholders. In an interview published in the Houston Chronicle, Sinegal stated, “We want to build a company that will still be here fifty and sixty years from now.” His beliefs were if you treat the employees and the customers right, profits will follow. He had a six-part strategy that helped Costco get to where they are today: Sell a limited number of items (not have so many different brands of the same item, he thought it minimizes purchasing), rely on high volume, pay workers well, have customers pay for membership, aim for high end-customers, and don’t advertise. I think Jim Sinegal’s number one strength is clearly the compassion that he has for his employees and his customers. He has the unusual combination of someone...
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...Company Report: Costco 1. Dameon Jame Background 2. Chandra Willie Mission/Code of Ethics 3. Brian Sanichar Strategy 4. Gopal Mohan Marketing Strategy 5. Anwar Rahman Financials 6. Airon Melo Financials/Competition 7. Sohani Somai Current Status of Costco 8. Kyle Hecter Recommendations Dameon James Background Costco Wholesale Club wasn’t always the wholesale club company that generated $71 billion dollars in 2008 as well as having 544 warehouses in 40 states; Like any other company, Costco was a blueprint waiting to dominate the wholesale industry. The Person that came up with the membership warehouse concept was Sol Price. The very 1st price club per say was conducted in San Diego California on Morena boulevard at an airplane hangar in 1976. Sole Price started to experiment with discount retailing called Fed-Mart and that is where future CEO Jim Sinegal got his start as he was employed at the fed-mart loading mattresses earning only an abysmal $1.25 an hour while attending San Diego Community College at the same time. Soon after that, Price decided to sell away fed-mart to focus more on his new empire, which was the San Diego Price Store in which Jim Sinegal tailgated with him to help him build that empire. This proved to be a successful move as within the next few years, the Sol Price club stores rose to the top of the list as the number one leader in member warehouse retailing and the most intriguing thing about this is that it has gained...
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...Costco Case Analysis Assignment # 1 Mark Frenkel MGMT 670 9046 02/21/11 Jim Sinegal initially took a job at Fed -Mart as a means to pay his bills while attending San Diego Community College never imaging that this decision would forever change the direction of his life. It was there that he met Sol Price, who ran the company and who mentored his further inclusion in the business. Sol had a vision that he acted on when he founded his Price Club with the goal of establishing a member warehouse retailing niche business. Having embarked on this path, he took Jim with him and they shared a vision for shaping how they would do business going forward. Initially, Price was content in becoming a leader in member warehouse retailing until he correctly recognized an opportunity to gain more sales volume and greater negotiating leverage with suppliers by granting membership to individuals which arguably created the market for deep-discount warehouse clubs. Sinegal excelled at understanding the driving elements in this type of marketing and became particularly adept at understanding what was working and what wasn’t at stores, which was something that Price was also very good at. Noticing these burgeoning skills, Price made him the manager of the original store. It was here that Sinegal learned the craft at the hands of his mentor, a task he did so with such skill that he decided to leave the proverbial nest and team up with Seattle-based...
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...srl Case 1 Costco Wholesale Corporation: Mission, Business Model, and Strategy he was prone to display irritation when he disagreed sharply with what people were saying to him. In touring a Costco store with the local store manager, Sinegal was very much the person-in-charge. He functioned as producer, director, and knowledgeable critic. He cut to the chase quickly, exhibiting intense attention to detail and pricing, wandering through store aisles firing a barrage of questions at store managers about sales volumes and stock levels of particular items, critiquing merchandising displays or the position of certain products in the stores, commenting on any aspect of store operations that caught his eye, and asking managers to do further research and get back to him with more information whenever he found their answers to his questions less than satisfying. It was readily apparent that Sinegal had tremendous merchandising savvy, that he demanded much of store managers and employees, and that his views about discount retailing set the tone for how the company operated. Knowledgeable observers regarded Jim Sinegal’s merchandising expertise as being on a par with that of the legendary Sam Walton. In 2006, Costco’s sales totaled almost $59 billion at 496 stores in 37 states, Puerto Rico, Canada, the United Kingdom, Taiwan, Japan, Korea, and Mexico. About 26 million households and 5.2 million businesses had membership cards entitling them to shop at Costco, generating nearly $1...
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