Introduction To Costco
Costco Wholesale is an American multibillion-dollar corporation founded in 1983. This multinational corporation has warehouse club operations. It operates in 11 countries and takes the goals of global retailing a step ahead. Its headquarters are in Seattle, WA and its warehouses are located at 804 locations throughout the globe. It is respected for its magnificent business ethics, is dedicated to quality throughout its business, and is a well-known leader in its field. It is a big-box retail store that requires the customers to have a membership to shop there. The chairman of Costco is Hamilton E. James and the President, as well as CEO of Costco, is W. Craig Jelinek. In this article, we will see the Costco Mission and Vision statement and its value analysis.
The Mission Statement Of Costco
The members should be provided with low prices but through the most convenient services associated with high quality.
- The employees of Costco have gone far ahead of their mission statement. This mission statement has three keywords: ‘low price,’ ‘quality,’ and ‘convenient services.’ The corporation has targeted the need of the members to seek good quality with reasonable prices. This can easily attract more customers.
- Doing the right thing is the foundation of its business.
- Costco will continue to improve as it learns about its global impact and global challenges such as human rights, natural resources, and climate change.
- This mission statement is easy to understand. Low prices are also useful when a global corporation like Costco has to face tough competition in its field.
- It also indicates that this global retailer always brings the best and cheapest options for the members. It develops a supply chain for the same.
- These low prices set by Costco affect the general pricing of different products and services in the market. It also demonstrates well-organized and open retailing approaches to the world.
- Costco maintains a four-fold strategy for sustainability and responsibility towards the environment. The four points are as follows: Initiatives towards the packaging design, reduction of carbon footprint, boosting the systems for the management of warehouse energy, and the development of waste stream management.
The sustainability principles of Costco
- For the development of Costco, the world has to develop first and it committed on its part to do the same
- It focuses on business-related issues and where it can come up with a real and positive outcome.
- It accepts that it is adapting continuously and doesn’t have all answers.
- To take care of their employees.
- The communities where its employees and members work have to be supported by Costco.
- The operation should be done with responsibility considering the environment.
- Strategic sourcing and merchandising have to be done sustainably.
The Vision Statement Of Costco
The Vision Statement
Efficient buying and operating practices have to be used here to provide incomparable savings to the members.
- The three main points in this vision statement are: ‘Efficient buying and operating,’ ‘membership,’ and ‘incomparable savings.’
- Incomparable savings are provided through the low prices for better quality. These savings can be done via discounts for the members or via Costco Cash Cards.
- Since this corporation uses the warehouse club model for its members, it focuses on access using the membership. However, the core objective is to provide low prices through discounts to attract customers.
- Costco has increased the types as well as the number of goods related to it. A testimony is a tradition of this company where it states how hard it is for the company to let the customers find their goods virtually.
- It provides a site that is integrated and easy to navigate. It creates a joyful experience for the customers. Also, the customers don’t have to worry about the product delivery because the company has a trusted delivery service to provide the customers what they want in pristine condition and in less time.
The Values Of Costco
The values of Costco are referred to as ‘the code of ethics.’ They are:
- To follow the law.
- To take care of the employees.
- To take care of the members.
- To value the vendors.
- These values indicate that the corporation also considers rewarding its stakeholders.
- These values were developed by its founders and are followed by the employees regularly.
- This corporation is famous to be a role model for other markets in the same field due to its business strategy.
- Costco considers these values as the important ones for the operations of the company. This leads to its success.
- Respecting these values will indirectly respect the other entities such as the members, employees, and vendors of the corporation.
- It has truly affected its growth since its establishment.
SWOT Analysis Of Costco
- It has a robust market presence in America. It is also popular amongst the customers there.
- This firm can attain economies of scale through the supply chain that can be expanded.
- It has a Kirkland Signature brand. Thus, customers find it trustworthy.
- The low prices with good qualities on the products attract the customers.
- Its membership model is different from that of the other product retailers. Membership is needed to shop here and it provides customers with an annual membership of $60.
- The customer base is loyal with membership and it has been increasing over the years.
- No budget for advertising. Its competitors such as Walmart and Target spend a huge amount on advertising but the former CEO and the Co-founder of Costco find advertising evil as it costs much.
- High payment for the employees. The employees get a higher salary and various benefits. The employees are also highly proficient in their jobs.
- It is one of the substantial employers in America. In that case, it was in the first position in 2017.
- The distribution network is big. It was spread with more than 782 warehouses in various countries across the world in 2019.
- Though there are many products in the company, the variety in the individual products is less as compared to other giant retailers.
- This proves to be a negative point in attracting the customers.
- Though Costco is present across various countries, its global presence is not notable.
- The products from Costco are often sent back. This is called the ‘product recall.’ This hits the company and the trust of the customers. The reputation of the company once got down becomes difficult to lift.
- The new generation follows digital marketing and buys in bulk. Thus, the lack of digital advertising and e-commerce presence of Costco doesn’t attract the new generation.
- It does research and development but it is still far behind the major retailers.
- Canada and the US are the greatest contributors to the company. This is called ‘Geographical Dependence.’ Thus, a new competitor coming into the market can affect the position of Costco. The economic crisis will be a direct effect that could be seen here.
- It can grow online easily. People want the products and services to be just one click away. Thus, a strong e-commerce presence can strengthen the image of the company.
- An increase in the number of household products can attract more customers.
- Costco hands over the information of the customers and employees to the third-party cloud as a part of its security. But this introduces the threats as the information can fall in the wrong hands.
- Costco doesn’t focus on e-commerce. But people are constantly in search of online services. This may result in the ruination of the company.
- The exchange rates are pulsating frequently. This can easily affect the companies working internationally.
- Walmart, Amazon, and Target are some of the greatest competitors of Costco. However, Walmart and Costco have fierce competition. They constantly keep on changing their games. Walmart is the largest retailer across the globe currently. Walmart has a heavy expenditure on its e-commerce section while Costco doesn’t.
- Since Costco operates internationally, it can easily fall prey to political issues across the countries.
- Many retailers are finding ways to reduce operational costs because the manufacturing costs have dropped in recent years. It has introduced great competition for Costco.
- Though Costco pays high to the employees this amount is still lower than some of its competitors.
Costco’s mission statement, vision, and values focus mainly on the experiences of the customers. This makes it unique. Customers are unbound to choose what they want but still, there are some boundaries while doing so. These three statements of Costco are well-aligned with the nature of its business.
Frequently Asked Questions
1. What Is The Culture Of Costco?
Achieving excellence in performance is the culture of Costco. It isn’t enough to be good enough. Its culture encourages the employees to accomplish high quality for customer satisfaction.
2. Is It Hard To Get Hired At Costco?
Getting hired there is competitive but not hard. Retirees are mostly employed there. However, the basic rule for applying there is that the candidate should be at least 18. The candidates have to pass a drug test at the time of the interview. If a candidate fails, then he/she will have to re-apply after a year. The candidate should also have basic certifications like the one for driving.
Four major areas of work in Costco are:
- Warehouse work.
- Corporate work.
- Distribution work.
- Licensed programs.
3. What Are Some Benefits And Perks Of Working In Costco?
They provide the following to their workers:
- Health Insurance.
- PTO policy.
- Thanksgiving turkey.
- Dental Insurance.
- Life Insurance.
- College students can continue with the job when they go to college.