Question

In an MLA formatted essay, please discuss the management practices that contribute to Costco’ssuccess. You may analyze Jim Sinegal’s leadership, Costco’s employee empowerment, group decision making related to buying, degree of centralization among other topics. The essay should be between 850-1000 words.

Answer 1

Costco is one of the popular discount retail store which was started in 1983. Later on it became fifth largest store in US and eleventh largest in the world. The sales keep on increasing every year. It is recognized for loyal customers and happy employees.

Success Mantra of Costco .Costco is able to offer products to customers at low prices and better values. This it achieves by reducing unnecessary costs like elimination of middlemen, salesmen, costly buildings,delivery charges, billing related expenditure. Costco stick to its values and principles even after so many years of grand success.

Key points for Costco Success Story:

• Costco says Customer is the King. A customer is satisfied by getting good quality product at less price. Costco built their own meal plant and bakery to keep the cost of hot dog low.Thus they hit the bull's eye by satisfying the customer.
• Costco saved on many unnecessary expenses. The warehouses of Costco are very simply built.Shelves and infrastructure is very simple. Customer have to do self service and get their goods themselves from the shipping containers.
• Costco offer luxury and branded products at warehouse prices. As a result it has become the favorite of customers.
• Costco saved lot of money on delivery of product. It allows it customers to bring large trucks and flat bed carts to make loading and unloading easy.
• The smartest and most effective decision of Costco is the use of private label The Kirkland brand, as this brand has good reputation in market in terms of good quality and less costly.
• Doing bulk business with Kirkland Costco is able to get good deals.
• Costco also believes in happiness of employees. It focuses on in house promotions. It offers many facilities to employees like life insurance , medical insurance and subsidy to employees. It believes a satisfied employee results in satisfied customer.
• Costco makes use of regional sources to get fresh and good quality meat.It helps it suppliers in the growth of their business.
• Costco organization structure which is based on functional grouping characteristic and geographic divisions give it the advantage of adjusting to local market conditions.

To conclude we can say Costco has utilized the economic resources in the best possible way. As a result employees, customers, suppliers and other stakeholders are satisfied and happy.