Costco, regardless of external pressures from other wholesalers such as BJ’s Wholesale and Sam’s Club has distinguished itself and experienced tremendous success as a result. In 2010, Costco brought in a net income of 1.3 billion whereas its competitor BJ’s Wholesale drew in only 132 million. The following year, Costco’s net income grew to 1.46 billion while BJ’s’ fell to 95 million. Ever since the mid-2000’s, Costco’s profit has steadily increased while it’s competitors have struggled to simply keep their profits from plummeting. Part of the reason Costco’s profits remain so high is because they outnumber their competitors in terms of store locations. In 2014, BJ’s Wholesale had a total of 200 locations, Sam’s Club had 652, whereas Costco …show more content…
The trial membership would only last for a few months and ideally cost less than 45 dollars order to lure wary customers away from buying a full membership to Sam’s Club or BJs. Having this short-term membership would give Costco a competitive advantage because the other stores do not offer trials, and their membership fees are higher than Costco’s trial membership would cost. The store that customers initially chose is crucial because they will shop there for a whole year and are likely to feel committed to that store and renew their membership at the end of the year. “91% of subscribers renewed their memberships last year”, indicating that most of their current customers are satisfied, which would likely hold true for new customers as well (Kalogeropoulos). Having an affordable trial membership card as an option would enable Costco to attract customers who are on the fence about joining, and set them apart from their competitors. While there are certainly areas that Costco can improve upon, it is still evident that Costco is an extremely effective company. Kirkland, Costco's in-house brand products make up approximately 15% of the store’s merchandise. Customers have come to trust the Kirkland brand, whether it be on socks, plasticware, pizza, …show more content…
· Take care of our employees. · Respect our supplies. Costco promises to conduct its business in total compliance with the law in order to maintain strong moral dignity among its employees. This aids Costco’s in their honest reputation among product distributors, employees and customers. Costco recognizes that its customers are the reason for the company’s success. It acknowledges that there are many alternative-shopping experiences and strives to ensure that their customers receive a 100% satisfaction guarantee, a welcoming shopping experience and top-quality products that are not only low in price but also high in quality and safety. The two biggest competitive advantages that Costco has are its loyal customers and their “absolute pricing authority” that allows them to guarantee low prices. (Delete) Lastly, Costco strives to respect its supplies. Costco wants to create positive and honest buying and disturbing among all who work with Costco. In order to maintain these Code of Ethics, Costco enforces all directors, officers, and employees to comply with the Code of Ethics. Costco takes these ethics seriously and if a violation is reported, the Executive Vice President will personally be responsible for investigating the
According to the marketing consultant of Costco, it is Americans psychology that more and bigger is better and this strategy is working well in the warehouse along with understanding the customer needs and making products available. Triggers that makes up three quarters of the goods
Currently Costco holds 81.3 million cardholders and they buy in relatively small quantities, with no specific customer/member accounting for a meaningful fraction of a Costco’s total sales. Subsequently, individual members of wholesale clubs have little power or leverage to deal with a wholesale club over
Costco top competitors are Sam’s Club, Walmart, and BJ’s Wholesale Club. They have several warehouses that offers similar merchandise, selections and prices, which includes Sam’s Club, and BJ’s Wholesale
Their online sales were $3.5 billion in 2015, which is a 20% increase from 2014, and they are hoping to continue to grow their online presence (Great Speculations, 2015). They have also been working to produce more private label products, such as their brand Kirkland Signature, which are high quality products available at an affordable price. Customer demand for private label brands has increased recently, so Costco plans for private labels to make up 30% of their merchandise in the next few years (Trefis,
Cost-Focus Strategy : Keeping Costs & Prices for a Narrow Market is what C.E.O Ron Johnson focused on while trying desperately to change the image and marketing strategy for J.C Penny. J.C Penny is suffering due to tough competition from their competitors. Johnson knows that the only way to keep J.C Penny afloat is to become much stricter on below market priced items to make space for new ideas, and new ways to keep stores cost efficient. J.C Penny C.E.O know that to make more changes to the inside of the stores by lowering inventory cost and bringing in exclusive items will give this company a better shot at finding new customers and getting feedback on what the public really wants.
Corporate Social Responsibility Code of Conduct Dollarama has a very strong sense of corporate social responsibility and their code of conduct and ethics is proof of this. This code applies to all employees of the corporation and the employees are expected to act according to the rules in the code of conduct. “The objective of this Code of Conduct and Ethics (the “Code”) is to provide guidelines for maintaining the integrity, reputation, honesty, objectivity and impartiality of Dollarama.” (Dollarama Code of Conduct and Ethics, 2010) According to Dollarama, the policy mainly deals with but is not limited to these issues stated below.
As mentioned earlier, Costco’s code of ethics devotes the first section of the document to addressing compliance with laws and regulations. Being an enterprise that does business in various areas, the code makes it a mandate to comply with the laws of every community Costco operates in. Compliance with product safety and security standards, ecological standards, labor laws, antitrust laws, and corporate reporting and disclosures with the SEC and public communications are the major legal elements addressed in the company code of ethics. In addition, the code discourages illegal and unethical behavior by directing employees and company representatives not to offer, give, ask, or accept bribes, kickbacks, or any payments to influence the government
In all Trader Joe’s is one of the leading super markets in the U.S., but after careful analysis of their operations I believe there are opportunities that are currently being ignored by the company. The company doesn’t need to act on all the recommendations that I made, however it would be in their best interest to do so. Not only would the company grow at a faster pace, but it will make strides in areas that haven’t been occupied before. Despite these current pitfalls, Trader Joe’s still is a popular option in their
Cutco has targeted the high end of that market and created a corporate culture based on maintaining the highest quality standards. In the marketing strategy employed by Vector marketing, the company that manages the sales force for Cutco, customers have the ability to share their personal stories of family and times when their Cutco product has helped or served them. Thousands of customers have written stories to the company to express how their products have affected their lives, it is these stories that create lifetime customers and appeal to other consumers when looking for what they want. Vector calls this the friends of friends approach to marketing and it is very successful in this case as annual sales are over $200 million. I believe that there is more money to be had if they mass produce and used either retailer or wholesaler channels, but Cutco isn’t willing to sacrifice the quality for the
Market Segmentation: To be of value market segments must be measurable, substantial, accessible, differentiable, and actionable (Kotler & Keller, 2012). Segmentation of demographics for Costco is vast as the current product offerings include all genders, ethnicities, incomes. age groups, and social classes. When considering demographics, it is important to consider the average or typical characteristics of the target market. As mentioned earlier the target market or focus for this company is supplying the small- to medium-sized business and targets the middle- to high-end consumer with its private label brand Kirkland Signature.
Specifically, Ralph’s (similar stores are Vons and Albertson’s) and Whole Foods (similar stores are Gelson’s and Trader Joes) are two firms that utilize cost leadership and differentiation. On one hand, we have Ralph’s using cost differentiation by providing a broad range of merchandise at a decent price. On the other hand, we have Whole Foods that has implemented a differentiation strategy by marketing their merchandise as healthier (organic). The trade of for both companies is that they are attracting less consumers by just marketing to a specific crowed. For instance, if Whole Foods had lowered their price and still sold premium merchandise, soon Ralph’s would be in trouble.
We can see that each department has its own rules and management style. Other than that, Ebbers‟s disapprove the effort of establish of a corporate Code of Conduct in WorldCom .The code of corporate governance
Actions vary to correct deviations or inadequate standards. All employees are expected to display responsible and ethical behavior, to follow consistently both the meaning and intent of this Code and to act with integrity on a daily basis. Managers and leaders are expected to ensure that PepsiCo’s business processes and practices fortify the Code, to serve as positive role models by establishing and adhering to high moral models, and to create an ethical culture by empowering and remunerating actions that are consistent with the
According to Section 1 of the Auditing Profession Act, reportable irregularity is defined as, any unlawful act or omission committed by any person responsible for the management of a corporation, who has caused or likely to cause material financial loss of the entity or stakeholders, fraudulent of amounts to theft, represents a material breach of any fiduciary duty. (independent regularity board for auditors, 2015) Laws and regulations Ethics and business conduct plays a significant role in all professional corporations. In demonstrating the core values, the code of conduct aims to improve the transparency of business processes. The purpose of the code of conduct is to protect the corporation’s reputation in the event of a breach of conduct by the employees of the corporations.