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Essay / Research Paper Abstract
This 4-page paper discusses the effectiveness of Costco Wholesale Corp. and its leader, Jim Sinegal. Bibliography lists 3 sources.
Page Count:
4 pages (~225 words per page)
File: AS43_MTcostcoca.doc
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Unformatted sample text from the term paper:
focus relies on salary and benefits. As the case study points out, approximately 82% of the employee base has health-insurance coverage (compared to less than half of the employees at
Wal-Mart Stores), with wages being 40% higher than rival Sams Club. About 91% of the employee base at Costco is covered by retirement plans (versus 64% at Sams Club), and
the company policy is to promote from within. This latter means that workers at all levels are able to get ahead, if they wish.
Even better is that the employees motivation and commitment are intrinsic - in other words, employees genuinely enjoy their jobs which, in turn, leads to better customer service
and more efficiencies and productivity overall. Other efficiencies come from a standard store layout, computerized inventory system and few products - the fewer
the products, the easier they are to keep an eye on. Explain how Costco was successful in pursuing low price strategy while
providing higher compensation to its employees. According to the case study, part of Costcos M.O. is to charge buyers to shop at its "warehouse clubs" - such subscriptions help the
company keep product costs lower which can then, in turn, be put toward other areas, such as compensation (Biesada, 2011). It also helps ensure customer loyalty, meaning more sales (Biesada,
2011). Other cost-reduction activities include store layout, product presentation and the buildings themselves, which function as retail outlets as well as warehouses. Inventory
costs are also kept low by having a limited variety of product sizes. Bargaining power with suppliers is also high, meaning costs can be reduced there as well (Wahlstrom, 2011).
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