Costco's Value Chain Analysis

“Americans think the U.S. economy benefits when big businesses or small businesses make a profit, although, by 84% to 64%, more consider small-business profits helpful”(Saad). Although those are some supporting facts for large businesses in America, they are too powerful and too rich. In the past and even in present time large companies generally hurt their consumers and workers. The main focus for businesses is to make money off their customers.

Additionally, efficient distribution channels, optimal outsourcing and vertical integration, bargaining power to negotiate the lowest price for production inputs as well as high buying capacity all participate in making cost leadership a go-to strategy for high return on investment and profitability. The possible downsides of this strategy can vary from low workers remunerations to exploitation of unskilled workers. The advantages of cost leadership are often threaten by external business environment threats such as higher minimum wages laws. Examples of successful cost leadership organisations: WAL-MART.INC (ASDA), Costco, MCDONALD 'S, IKEA.

They always keep themselves up to date with new tools that help them make business faster and more convenient for customers. For example, Pizza Hut- the brand owned by Yum! Brands- have created automatic ordering systems that customers can order pizza, pay and come to pick it up when it is ready. Besides ordering online, technology also helps consumers locate their favorite fast food restaurants in their nearest area and show them how to get there. From the restaurateurs' perspective, digital menu boards, flat screens and in-store signage will be critical marketing tools.

CompTech’s critical strength is that it has a large market base which increases the number of their customers. The presence of a large market base for their goods has enabled CompTech to have a competitive advantage over their competitors and also capitalize on their economies of skills as well as increasing their profit margin. One of their weaknesses is that they have very high number of vacancies which means more resources are used in recruiting and training new employees. Therefore it is difficult to find an employee within the corporation with three years of supervisory experience. Internal recruitment to fill in the store managerial positions is very difficult to do according to this case.

The factory system that was created during the Industrial revolution had many positive effects on the economy. It increased wages, allowed the production of goods to be faster, and allowed more goods to be produced. The Industrial Revolution was a time where the transition to a modern industrial society made the economy rely more on modern machines instead of tools. There were remarkable changes that occurred in the economic structure due to the creation of the factory system.

This upward pressure may be positive for workers initially, but wages have a direct impact on the profitability and competiveness of business, especially in the global economy. Batalova and Lowell (2007), stated to meet the demands of the global economy internationally oriented business depend on a workforce that is highly skilled. In the face of a shrinking workforce, business turn to immigration to satisfy their demand for these highly skilled workers. This places additional demand on these highly skilled workers from less economically developed

Having a sweatshop is an imperative measure to maintain high level of productivity as labor cost is minimized. Sweatshops become a trend in the industry; therefore, organizations are just following the trend to stay competitive. Manufacturing in sweatshops increases productivity of companies and maximized the profit margin. Besides, to think in a different way, sweatshops help the economy of the poverty country since the international organizations bring in employment opportunities, put in capital and resources into the third world countries. In addition, companies in some situations have to make scarification in order to benefit the employees.

If businesses are booming, it is also good for the economy.” Immigrants tend to work harder, and for less, than the average American. They strive to better their lives in comparison to how they lived in their former countries. The United States utilizes this in their favor economically since immigrants contribute to businesses as well as pay taxes. Culturally, immigrants are what make America such a diverse nation today.

Environmental impact assessment "Environmental Impact Assessment (EIA) is the term applied to the systematic examination of the likely impacts of development proposals on the environment prior to the beginning of any activity". (http://www.ncte.ie/environ/eia.htm) Screeningis the process of ascertaining whether a development requires an Environmental Impact Assessment (EIA) is determined by reference to mandatory and discretionary provisions as set out in the Planning and Development Acts (2000-2010) and the Planning and Development Regulations (2001-2011). The likelihood of significant environmental effects is the principal issue around which consideration of the requirement for an EIA is focused. These significant effects have the potential to occur due to nature of the proposed development, the scale, massing or magnitude of the proposed development and the intended location of the development in relation to particular environments sensitive to

However, globalization is controversial. The proponents of globalization claim that it gives an opportunity to the poor countries to grow and develop economically. On the other hand, opponents claim that free market has benefitted multinational corporations at expense of the local people, culture and enterprises. The management concepts create a significant

Samuel Gompers, influential leader of the American Federation of Labor, once stated: "Our movement is of the working people, for the working people, by the working people" (“Samuel Gompers”). Over the years, unions have proven this to be true. Although oftentimes detrimental to the economy, the labor effort changed the workplace for the better. Thanks to the persistent toil of unionists, justice was served where it was previously lacking. Labor unions noticeably affected the economy, improved conditions in the workplace, and increased wages for the common workingman.

The SWOTT analysis table below provides the summary of internal and external analysis findings of Costco’s new division. Factor Trend Threat Weakness Opportunity Strength Technological The online shopping for food is becoming popular. The small start-up food industries may develop superior food products and capture the food market share.

PRICE CLUB and COSTCO more than the current market for the merger of the two stores. PRICE CLUB for the world's first member of the wholesale and retail stores, was founded in 1976 in San Diego, California, initially to serve small businesses, and later to serve the wider consumer masses, they are open for a group of each purchase , And the first COSTCO stores in 1983, was established in Seattle, Washington, in its business just six years, the annual turnover from 0 to grow to 3 billion US dollars. The two companies merged in 1993 to become PRICECOSTCO and in 1998 they changed their name from Pleasant to Costco Company

The warehouse companies, such as Costco and Sam’s Club, use the subscription business model. Customers, who want to buy at the store and get the best offers, discounts have to buy a membership with the commitment of lower prices for the initial cost (Page 2015 n.p.). The companies’ customers subscribe not for products, but rather for serves of low prices.

Walmart stores is one of the largest retailers not only in the United States but across the world. They hold tremendous power from a retail level and on a political level with governments in the US and outside. Ratios help create Walmart as a company and allows investors to be able to gauge and understand the metrics of the organization. These metrics and ratios help investors understand the specific direction of the company and the effectiveness of executive leadership. The primary ratio that must be understood regarding Walmart's earnings-per-share is the price earnings ratio.