...whereas Costco is a key competitor in the member warehouse-style market. Only Costco (Costco Annual Report, 2011) is currently competing in the international marketplace. Financial Health Wal-Mart Stores Incorporated (WMT), Target Corporation (TGT), and Costco Wholesale Corporation (COST) are public held companies with stock traded on the New York Stock Exchange (NYSE) and required to file an Annual Report on forms 10-K annually with the Security and Exchange Commission (SEC) (Stock Quotes, 2012). Meijer’s is a family-owned private company and not subject to SEC filings of their performance and is excluded from analysis because their financial data is not available (At 75, Meijer family still controls retailers destiny, 2009). Income Statement The latest income statements submitted by Wal-Mart, Target, and Costco to the Security and Exchange commission all reported millions in profit (Stock Quotes, 2012). Wal-Mart’s consolidated net income for its fiscal year ending January 31, 2012 is $15,699 million (Walmart Annual Report, 2012), which equates to a $4.54 net per share income, and resulted in $1.46 paid in dividends for each common share (Walmart Annual Report, 2012) ). By comparison, Costco latest annual report for fiscal year ending August 28, 2011 reported $1,462 million in profit with a net income per share of $3.35, and $.89 in per share dividends (Costco Annual Report, 2011). Target’s annual report for their fiscal year ending January 28, 2012 is $2,929...
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...Costco Wholesale Corporation: Annual Report 2012 Costco’s Annual Report 2012 opens with a description of the corporation’s history of ownership, its subsidiaries, and locations. It also identifies that the company is traded on the NASDAQ under the symbol “COST” (Costco Wholesale Corporation). At the very beginning of the Costco’s 2012 annual report, a financial highlights page which bar-charts depict its performance over five progressive years from 2008 to 2012 in the following categories: Warehouses in Operation; Net Sales; Net Income; Comparable Sales Growth; Membership; Average Sales per Warehouse; and Selling, General and Administrative Expenses which were clearly marked with any variances to the data being compared. The bar charts provided a basis for accounting analysis by depicting intracompany basis of comparison from one year to the next, and using a horizontal analysis approach. An “intracompany” basis of analysis compares an item or financial relationship within a company; a “horizontal analysis,” also called “trend analysis” is a way of evaluating a series of financial statement data over a period of time, with a purpose of determining changes in a company’s financial performance (Weygandt, Kimmel, & Kieso, 2009). Utilizing a means of comparative analysis is essential and significant in analyzing a company’s solvency, liquidity, and profitability. It assists a company’s internal and external stakeholders; its customers, employees; or the government to assess...
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...ACCT 600 MAFM CAPSTONE BECAUSE OF THE RISKS CAN COSTCO ACQUIRE THE #3 KMART? ABSTRACT The retail business is very competitive. Because the retail industry provides products and or services for the needs, wants, and sometimes feelings of the consumer it can be hard to determine what they like and don’t like. Moreover, with the economy, which by the way affects all businesses, you just do not have an exact science on how things will turn out. Industry businessman, economist etc. can only make assumptions based on occurrences. So, if you are in a business to make a profit, and satisfy stakeholders you need to have a plan. Sometimes the plan calls for mergers and acquisitions. Mergers and acquisitions can have a positive and/or negative effect. “According to a KPMG study, 83% of all mergers and acquisitions failed to produce any benefit for the shareholders and over half actually destroyed value.”(http://www.itapintl.com/...the-impact-of), to be a good CFO you must do the research to determine if acquiring another company will be beneficial. This report will identify the risk factors of the target acquisition company Kmart and the risk factors present in the parent company Costco. Our team will then show how these risks can be mitigated. BECAUSE OF THE RISKS CAN COSTCO ACQUIRE THE #3 KMART? KMART RISKS/MITIAGATION Many investors such as Costco may be unaware of all the risks associated with investing in a specific company. Providing current and future...
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...Nova Southeastern University Wayne Huizenga Graduate School of Business & Entrepreneurship Assignment for Course: MGT 5090 Entrepreneurial and Strategic Thinking Submitted to: Ron Steffel Submitted by: Georgette McIntosh N01 Xie Luxuan Dorquidia Alemany Date of Submission: May 3, 2015 Title of Assignment: Costco Case Study CERTIFICATION OF AUTHORSHIP: I certify that I am the author of this paper and that any assistance I received in its preparation is fully acknowledge and disclosed in the paper. I have also cited any sources from which I used data, ideas of words, whether quoted directly or paraphrased. I also certify that this paper was prepared by me specifically for this course. Student Signature: Georgette McIntosh ******************************************* Instructor’s Grade on Assignment: Instructor’s Comments: EXECUTIVE SUMMARY he purpose of this report was to examine the implications on employees motivations used at Costco Wholesale Corporation. Research for this report included a review of he purpose of this report was to examine the implications on employees motivations A. Problem Statement: State the main problem facing the firm (or industry) in one, succinct sentence. B. Analysis: Summarize the main findings of your analysis. You may use bullet points, bold, italics – any means to convey and highlight the key factors you have determined based on your analysis. C. Alternatives:...
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...Financial Analysis of Costco Wholesale Corp. Costco Wholesale Corporation (Costco) is a publicly traded company based on the concept that offers, members, low prices on a limited selection of nationally branded and select private-label products in a wide range of merchant categories. It operates warehouses in the U.S., Canada, the United Kingdom, Japan and Australia and through majority-owned subsidiaries in Taiwan and Korea. The company warehouses present exclusive products which include appliances, auto tires, clothing and accessories, computers and electronics goods, grocery, furniture, health and beauty, home and décor, office products, fitness and sports, travel and luggage. Costco provide ancillary services that include gas stations, pharmacy food courts, optical dispensing centers, hearing aid centers, photo processing centers. Costco was ranked 19th and 18th by Fortune 500 in 2013 and 2014 respectively. Major competitors are Sam’s Club (Wal-Mart Stores Inc.) and BJ’s Wholesale club, Inc. Costco was founded by James D. Sinegal and Jeffrey H. Brotman in 1983 and is headquartered in Issaquah, WA. (COST, n.d.). In this essay, the 2014 annual report of Costco will be reviewed using the financial analysis tools of liquidity, profitability and solvency. A further analysis will consider three (3) non-financial factors that impact on investment decisions. Financial Tools Analyzing Liquidity Liquidity is defined as the degree to which an asset or security can be bought or...
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...Introduction Costco Wholesale Corporation "Costco" operates in the discount warehouse and wholesale club industry segment. Costco has had a long history of successful management and recently has come under new leadership. The warehouse and wholesale club industry has three main competitors in the North American region however it is facing increasing pressures from low-cost retailers, nationally and Internationally. Although still profitable, the company experienced some erosion of their growth rates during the most recent fiscal year (2015). Costco's new management team will need to focus on the company's core competencies of low-cost leadership and providing superior customer value to maintain its market position within this market segment. Mission & Growth Strategy Costco's mission is "to provide the highest quality goods and services at the lowest possible prices while providing excellent customer service...." (Thompson, 2012). They strive to provide their members with un-matched value, a treasure hunt shopping experience and high quality service. Their philosophy entails taking care of their staff, the staff provides quality care to the members, and member retention will provide financial gains to the shareholders. Their growth strategy is achieved through opening new warehouses throughout the world and increasing club memberships. Club membership fees are a critical component of Costco's financial success. Membership fees accounted for approximately 70%...
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...removed from inventory items on hand either decrease or increase in number. This paper will review inventory systems within Starbucks, Wal- Mart, Dell, Arby’s, and Starbucks. The paper will also provide information regarding the success of the inventory systems and if the companies are happy with the current systems. Businesses and Inventory Systems Dell is a leading global software company that manufactures desktop computers, notebook computers, network servers, work stations, and storage products. Dell uses the Just-In Time inventory system. Just-In-Time means a company can receive raw materials just in time to go into production and complete and assemble manufacturing parts just in time to ship to customers (Accounting 4 Management, 2012). The advantages of the Just-In-Time system are that it permits Dell to reduce overhead and have certainty that products are available. The Just –In-Time inventory system reduces the cost of doing business. For example, Dell does not have to spend an enormous amount of funds on the cost of warehouse storage and the customer receives the benefit of lower cost for products. The company has a high satisfaction rating because of their ability to produce products at a fast rate. The challenge includes the possibility of the company not receiving the products from suppliers on time. This can cause a delay in shipping of Dell products to its customers. Dell is happy and will continue the current inventory system because of cost savings and reduction...
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...right customer is the ultimate objective of targeting specific markets by directing the research and efforts in a manner consistent with and specific to those particular segments characteristics. Segmentation divides the consumers into groups with similar desires by examining demographic, psychographic, geographic, and behavioral individualities (Kotler & Keller, 2012). Branding and strategy is equally important and will be discussed later in the positioning statement. Target marketing and segmentation for Costco Wholesale is unique to other retail business as it operates as a member-only warehouse club. Costco initially opened the doors as Price Club in 1976 and operates domestically and internationally in 663 locations worldwide, and is headquartered in Issaquah, Washington (Costco Wholesale, 2014). The original target focus for the warehouses were designed and targeted to accommodate small-to-medium-sized business for the purpose of purchasing for affordable resale, and has since become popular to the individual personal needs and desires as well with their Kirkland Signature private label brand products. Costco claims that each warehouse offers products that are of top quality, the most exclusive, at the lowest price, and offers the largest...
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...Wesley MGT/521 Monday, October 1, 2012 Dennis R. Boedeker, MBA, C.P.M., CPIM Certified Advanced Facilitator Assuming the role of a Mutual Fund Manager, Costco Wholesale, a Fortune 500 company, has been chosen for analysis to decide whether to invest funds with the organization. This paper will high-light the results of a SWOT analysis, the internal and external stakeholders, their wants and needs, and finally, how their wants and needs are being met by the company. Costco Wholesale Company is an acknowledged market leader and was listed 28th in the top 100, most successful businesses in the world, in 2010, and 25th in 2011. “In 1975, a Mr. Solomon Price, sold his company Fed-Mart to begin a new retail venture, aimed at small businesses called the Price Club. Mr. Price invited Jim Sinegal, owner of Costco, to help him open the first Price Club Warehouse in 1976. Sinegal learned from Price the business of a high-volume warehouse with only a limited number of products, and left Price in 1983 to start Costco, with partner Jeff Brotman. Costco merged with Price some years later, and Sinegal bought Price out and remained as CEO of Costco. Today, as of August 31st, 2012, Costco has 608 warehouses, 66.5 million cardholders, 160,292 full and part-time employees world-wide, and a revenue of $88.9 billion annually” (Corona, 2012, p. 558). One cost advantage for Costco is that they sells in bulk; allowing...
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...Annual Report Analysis Costco Wholesale Accounting 305 Table of Contents Introduction………………………………………………………………………………………………………2 The firm’s auditors and their opinion on the financial statements……………………………………………….2 The subsequent events, errors and irregularities, illegal acts, or related-party transactions……………………...3 that have a material effect on the financial statements were none……………………………………………......3 The trend in total assets and total liabilities for the years presented…………………………………………...…3,4 The company’s three largest assets for the most recent year presented……………………………………….…..4 The company’s three largest liabilities for the most recent year presented……………………………………….4 The types of stock the company has and the outstanding shares for each type of stock for the most recent year presented………………………………………………………………………………...4 The company use of multiple-step income statement……………………………………………………………..5 The income statement with no discontinued operations or extraordinary items, in any year presented…………..5 The trend in net income over the years presented……………………………………………………………....….5 The company has no comprehensive income reported……………………………………………………………6 The company use of indirect cash-flow statement method………………………………………………………..6 The trend in cash from operations for the years presented…………………………………………………………6 The two largest items included in cash from investing activities…………………………………………………..7 Conclusion…………………………………………………………………………………………………………...
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...Labor Laws and Unions Shadi Haddara HRM 531 November 19, 2012 Danielle Lombard Sims UPS The first and largest competitor to the United Postal Service, USPS, is the United Parcel Service, UPS, starting in 1907 in Seattle Washington. Today UPS ships 6,500,000 packages in a single day and employs 408,000 Worldwide. UPS today competes with Federal Express, Fedex, and USPS for market share and benchmark new services of off their competition. One of the most concerning legal matter UPS will be dealing with is the negotiation of the union contract, which expires July 31, 2013. But negotiations have started in preparation for the new agreement. This will cause UPS to potentially face serious obstacles such as strikes and a drop in service. This can also lead to losing market share. Depending on the approach that UPS will take in handling this matter, it might perform actions against federal, state or local laws. The organization will try to meet minimum law requirements during the negotiations in order to maintain competitive advantage. In general, these negotiations will be generalized for the international union across the nation. This means, depending on he state where each facility exists in, it might violate some state and local laws. References ...
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...it allowed two top companies achieve success. Total rewards management as we know it “encompasses not only compensation and benefits but also personal and professional growth opportunities and a motivating work environment” (Heneman 3). Hoovers.com states that internet search engine giant, Google, historically reports year-after-year revenue and net income growth. The total rewards management system is world renowned and the successful implementation of it is reflected in Google’s financial reports and consistent awards and recognition. The second company under the scope is US based retailer Costco which sells a variety of products from household appliances to bedding and groceries (Datamonitor.com). Costco Wholesale Corporation is often held up as a retailer that does it right, paying well and offering generous benefits according to Ann Zimmerman in her article Costco’s Dilemma: Is Treating Employees Well Unacceptable for a Public-Traded Corporation (Wall Street Journal). The conclusion will be drawn that both Google and Costco’s are leaders in both of their total reward management strategies and the implementation of it. But how? How did Google and Costco get to that point? People in the field of Human Resources recognize the many challenges associated with creating and implementing successful total rewards management strategies. In Implementing Total Rewards Strategies by total rewards management expert, Robert Heneman, Heneman says that “implementing total rewards programs...
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...INTRODUCTION The purpose of this report is to analyse a competitive industry using Terry Porter’s five forces model. The analysis will then narrow the industry into segments and focus on how key players in the segment exhibit distinct advantages. A discussion will follow on how the leading company achieves competitive advantage by means of their distinct competencies and whether they can sustain it over time. The chosen industry for this report is the retail industry, specifically the discount merchandiser segment. The key companies discussed in this paper will be Costco and Wal-Mart, two of the biggest discount merchandisers in the USA. While Costco and Wal-Mart operate under two very separate business models, they carry similar products and compete in similar geographical areas. The life cycle stage of this industry is in the mature stage where the market is now saturated with notable players aside from the two mentioned. Growth in this market is demonstrated by expanding into different geographic and other markets to increase their overall market shares. Under the maturity life stage, minimizing cost and expansion into different segments can develop a competitive advantage over other big box retailer competitors. Currently, Wal-Mart is the industrial and segment leader because of its ability to minimize their expenses and expand quickly in global and online markets. Wal-Mart Wal-Mart is a mass-market retailer operating in three segments: Wal-Mart USA, Wal-Mart...
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...others the way that you would want to be treated is good ethical behavior. Ethics, however, always comes down to being a personal choice and making the decision to do what is right, instead of what is wrong. A code of ethics can provide direction for a company on how the company plans to direct and implement its vision and the best way for the employees to help enable that vision. Most companies today post their code of ethics on their websites so consumers can see what they signify and stand up for as a business. Ethical Tone and Structure Costco is a business that many consumers are familiar with. They are a membership chain of warehouses that provide a wide array of merchandise, most of the time that merchandise is purchased in bulk quantities. Their code of ethics is pretty simple. “1. Obey the Law 2. Take Care of our Members 3. Take Care of our Employees 4. Respect our Suppliers 5. Reward our Shareholders” (Costco). Not to difficult and easily manageable. To improve upon their list, something could be added to refer to the way the company can improve upon environmentally. There is a blurb in the code for taking care of our members, to be ecologically sensitive, but not for a company as a whole. For instance, to make sound decisions when using transit to reduce a carbon footprint. Or initiating tree planting where appropriate to help replace...
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...Organizing: Costco Salena Jolley MGT/330 October 14, 2013 Angela Guest Organizing: Costco Grocery shopping can often times be a time consuming, tedious, and expensive trip. Most grocery stores offer a large variety of items for consumers to choose from. If a consumer needs a bottle of peanut butter, he or she will go to the grocery store where he or she is faced with a large variety of choices. Sometimes choosing which peanut butter to buy requires large amounts of time just looking at the different choices on the shelf. Some consumers may feel overwhelmed with the choices and walk away without purchasing any peanut butter. Other consumers will clip a coupon that offers a discount for one brand of peanut butter. When they get to the store, they find that the price of that brand of peanut butter even with a coupon is still more expensive than two or three other brands sitting on the shelf. Cutting out coupons and organizing them before making a trip to the grocery store is time-consuming and often frustrating for many consumers. In today’s economy, consumers want to go to a store that always offers a good deal and is competitive with other stores in price. Costco has cornered the market on amazing retail prices. In 1982 Jeff Brotman and Jim Sinegal met together to discuss plans of opening a new wholesale club business. By 1983, the first Costco warehouse opened up in Seattle Washington. By the end of 1984, nine Costco’s were open in five different states. In 1995, the...
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