COSTCO

1
(No Transcript)
2

• Matthew Arine
• Joe Edamura
• Hansoo Kim
• Anthony Pang
• Daniel Young

3
Agenda

• Introduction (Hansoo)
• Products and Services (Matt)
• Technology Implications (Anthony)
• Management Structure (Joe)
• Strategic Management Issues (Daniel)
• Recommendations

4
Introduction

• By
• Hansoo Kim

5
History Background

• Price Club store opened in 1976.
• The first Costco warehouse opened in Seattle in
  1983.
• Costco and Price Club merged in 1993, named
  PriceCostco.
• In 1997, resumed Costco Wholesale as company
  name.

6
Operation

• Wholesale
• membership

• Primary Target market
• Small business member
• General Target
• 4060 year old people
• College educated
• Higher income

7
Company Goal

• Costcos mission is to continually provide our
  members with quality goods and services at the
  lowest possible prices.

8
Warehouses

• U.S. Puerto Rico 305
• Canada61
• United Kingdom15
• Taiwan3
• Korea5
• Japan4
• Mexico21
• Warehouse size
• 70,000160,000 sq.ft.

9
Employees

• U.S. 75,880 full and part-time
• Worldwide 102,000 full and part-time

10
Products and Services

• By
• Matthew Arine

11
Products

• Variety of products
• Appliances, electronics, furniture, jewelry, etc.
  
• Quality, brand-name merchandise
• Sony, Whirlpool, Mont Blanc, Kirkland Signature
• Unconditional Guarantee
• Full Refund
• Best possible price

12
Products

• How are prices so low?
• Purchase in bulk
• No sales people
• No fancy buildings
• Warehousing
• Minimized restocking
• Membership cards

13
Products

• Unconditional Guarantee
• Full refund

14
Services

• Multitude of services or side business
• Photo
• Tire Service Center
• Auto Buying Program
• Optical and Eye care
• Pharmacy
• Strategy to lure customers
• Web-orders with delivery

15
Technological Implications

• By
• Anthony Pang

16
Technological Implications

• Internal Resources
• Staff of Workers
• Inventory Control
• Reduce Operating Expense

• External Resources
• Demographics of Customers
• What to Sell?
• Capturing a Larger Diverse Pool of Customers

17
Internal Resources

• Employers Employees
• Efficiency in Workers
• Cut-out unnecessary work
• Managers can concentrate on sales

18
Internal Resources

• Inventory Control
• Reduce expenditure for goods
• Physical inventory count in less time

19
External Resources

• Demographics of Customers
• Large database of information
• Target groups

20
External Resources

• What to Sell?
• Customer preferences needs
• Buy the right item, sell the right product

21
External Resources

• Larger Pool of Customers
• Website Costco.com
• Additional services

22
Management Structure

• By
• Joe Edamura

23
Management Structure Topics

• Organizational Structure
• Senior Management
• Store Management
• Employee

24
Organizational Structure
25
Senior Management

• CEO, President James D. Sinegal
• Executive Vice Presidents
• Senior Vice Presidents
• Regional Managers/ Vice Presidents

26
SeniorManagement
27
Store Management

• General Manager
• Assistant General Manager
• Senior Staff Manager
• Entry Managers
• Supervisors
• Employee

28
Store ManagementHierarchy
29
Employees

• Reports only to one supervisor
• Control Span 121
• Thats just not enough managers!

30
Strategic Management Issues

• By Daniel Young

31
Three Major Management Issues

• Customer Service
• Employee Excellence
• Economic Strategies

32
Customer Service

• Unconditional Double Guarantee
• We guarantee your satisfaction on every product
  we sell by offering a full refund
• We will refund your membership fee in full at
  any time if you are dissatisfied

33
Customer Service

• Membership Card Implementation
• Keeps Costcos prices low
• tracks customer purchases, helping keep precise
  inventory counts
• sense of commitment and belonging, bringing
  customers back

34
Employee Excellence

• Maintaining loyal, well-trained employees
• Offers best wages
• many benefits
• Future of the workforce
• College educated
• Lower Managers make independent decisions

35
Employee Excellence

• We are proud to offer a very congenial, casual,
  yet professional work environment.
• Costco website

• Customer satisfaction depends on quality
  workers.
• - Jeff Van Ness, General Manager of Costco

36
Economic Strategies

• Advantages
• War
• Natural Disasters
• Economic Recession
• Economic Growth

• Disadvantages
• Tourism
• Dock Strikes
• Small BusinessesCutting back

37
Economic Strategies

• Low Operating Costs
• Just-In-Time Inventory Sys
• Keep Supplies in Store rather than a warehouse
• Do not transfer items to other Costcos
• Bottom line 2 profit margin

38
Recommendations
39
Recommendations

• Products and Services
• Expand Warehouse
• Deli, Gas Station, Rotisserie
• Option for Smaller Portions
• Advertise
• Catchy Ad Phrase
• Quality at Wholesale prices
• Vulnerability at the Top
• No Competition Attitude

40
The End