...How Wal-Mart Used Payoffs to Get Its Way in Mexico By DAVID BARSTOW and ALEJANDRA XANIC von BERTRAB Wal-Mart de Mexico was an aggressive and creative corrupter, offering large payoffs to get what the law otherwise prohibited, an examination by The New York Times found. December 18, 2012BUSINESSNEWS Wal-Mart Hushed Up a Vast Mexican Bribery Case By DAVID BARSTOW Confronted with evidence of widespread corruption in Mexico, top Wal-Mart executives focused more on damage control than on rooting out wrongdoing, an examination by The New York Times found. April 22, 2012BUSINESSNEWS ------------------------------------------------- Top of Form Bottom of Form Company Information Wal-Mart Stores, Inc. (Walmart) operates retail stores in various formats around globally. Everyday low prices (EDLP) is the Company's pricing philosophy under, which it price items at a low price everyday. The Company's operates in three business segments: the Walmart U.S. segment, the Walmart International segment, and the Sam's Club segment. During the fiscal year ended January 31, 2012 (fiscal 2012), its Walmart U.S. segment accounted for approximately 60% of its net sales and operates retail stores in various formats in all 50 states in the United States and Puerto Rico, as well as Walmart's online retail operations, walmart.com. Its Walmart International segment consists of retail operations in 26 countries. Its Sam's Club segment consists of membership warehouse clubs operated in 47 states in...
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...Do all three warehouse club rivals-Costco, Sam’s and BJ’s wholesale – have highly similar strategies? No; What differences intheir strategies are apparent? Costco is providing items in bulk and at low prices; consumers gravitate toward discounting hoping to get the most out of their money. Sam’s is decreasing product costs by buying from low cost labor countries like China and Mexico. BJ’s is focusing on retail shoppers offering more grocery items and smaller quantities of packaged goods. Does one rival have a better strategy than the others? I think Costco has the best strategy due to the cost efficient distribution through the use of the cross dock distribution. Cross docking allows the club has the ability to minimize inventory, improve product quality and increase responsiveness to any changes in the market conditions. Does one rival have a somewhat weaker strategy than the other two? Yes; BJ’s because they’re not as popular and they’re concentrated in the Eastern United States, which allows the company tostreamline distribution and marketing. They’re also not benefiting from the economies of scales, because the margins are very thinand making low costs/high volumes are essential to profitability. 3. Which of the three warehouse club rivals has the strongest financial performer in recent years? See attached. Sam’s has a favorable Operating Profit Margin and CAGR operating income; Costco has a favorable Asset Turnover and CAGR Total Assets and BJ’s has favorable CAGR...
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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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...Mexico. Its annual sales per store averaged $130 million whereas it’s closest competition; Sam’s club averaged $75 million per store. (p. C32-C33) 2. What are the chief elements of Costco’s strategy? How good is the strategy? The chief elements of Costco’s strategy are low prices, a limited product line and limited selection, and a “treasure hunt” shopping environment (p. C-35). The company’s strategy is appealing because they entice with low prices to attract more customers. Similarly the company is also based on the limited product or product selection as more products mean more confusion for the customer. This technique helps to create a good relationship with its suppliers. The strategy contains all of the criteria to make Costco one of the successful companies today. 3. Do you think Jim Sinegal is an effective CEO? What grades would you give him in leading the process of crafting and executing Costco’s strategy? What support can you offer for these grades?...
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...Question 1 What is Costco’s business model? Is the company’s business model appealing? Why or why not? Costco’s business model focuses on selling limited selection of products at low prices, often at very high volume and rapid inventory turnover. These goods are bulk-packaged and marketed primarily to large families and businesses. Costco does not carry multiple brands or varieties where the item is essentially the same. It provides members with a selection of only about 4000 items, this results in a high volume of sales from a single vendor, allowing further reductions in price, and reducing marketing costs. Costco also saves money by not stocking extra bags or packing materials; to carry out their goods, customers must bring their own bags or use the merchandise shipping boxes from the company's outside vendors. Costco’s business model is appealing because rapid inventory turnover, high sales volume per warehouse, low prices, reduced handling of merchandise, are all elements that create value to a Costco’s members, and make the company successful. Question 2 What are the chief elements of Costco’s strategy? How good is the strategy? The chief elements of Costco’s strategy are: Low prices: Costco’s pricing strategy is to cap the margins on brand-name merchandise at 14 percent (compared to 20-50 percent margins at other discounters and many supermarkets. The margins on Costco’s private-label Kirkland Signature items are a maximum of 15 percent. Costco’s strategy...
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...Business Analysis Part III: Costco Wholesale Corporation MGT/521 June 14, 2012 Business Analysis Part III: Costco Wholesale Corporation Jim Sinegal, Costco Wholesale cofounder and CEO summed up Costco Wholesale Corporations strategic planning and operations in a nutshell according to the Retail Industry website, “Wall Street is in the business of making money between now and next Tuesday. We’re in the business of building an organization, an institution that we hope will be here 50 years from the now. Strategic planning is an important part of running any business and the more so for businesses that operating in multiple states and countries.” On May 27, 2012, Costco Wholesale Corporation reported sales that covered a period of thirty-nine weeks. The Corporation reported “net sales of $7.67 billion for the month of May, the four weeks ended in May 27, 2012, an increase of 7% from $7.14 billion during the similar period last year” (Bloomberg BusinessWeek, 2012). The company reported net sales ending in a thirty-nine week period of $71.28 billion, “an increase of 10% from $64.75 billion during the similar period last year” (Bloomberg BusinessWeek, 2012). Many may wonder why Costco Wholesale Corporation is the leading wholesale business in the industry. To provide a good understanding of why Costco Wholesale Corporation is the leading warehouse distributor in the industry, this paper will help provide understanding by discussing strategic initiatives of the corporation and...
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...significantly lower than those at supermarkets, discount retail chains, department stores, drugstores, and specialty retail stores like Best Buy. But BJ’s expanded their strategy a little more. It focused on its Inner Circle members through merchandising strategies that emphasized a customer-friendly shopping experience. Club locations were clustered in order to benefit from greater name recognition and maximize the efficiencies of management support, distribution, and marketing activities. BJ’s strove to establish and maintain the first or second industry leading position in each major market area where it operated. I think Costco has had the strongest financial performance in recent years because they have opened 265 new warehouses since 2000 and more than doubled their company revenues from $31.6 billion to $71.4 billion. Costco is responsible for...
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...Costco Marketing Plan Executive Summary: Costco is the largest membership warehouse club chains in the United States. As of July 2013, it is the fifth largest retailer in the United States and the ninth largest in the world. Costco is headquartered in Issaquah, Washington, and was founded in Seattle, Washington. Costco has locations in the United Kingdom, Canada, Australia, Mexico, Taiwan, South Korea, Japan, and the United States. Costco offers their customers with low prices on selected local and a limited selection of nationally branded products in a wide range of merchandise categories. Businesses and families can rely on Costco to offer high quality goods and services at everyday low prices. Rapid inventory turnover, high sales volume per warehouse, leveraging an efficient operating structure, reduced handling of merchandise, and making themselves the low cost operator in retail are all key elements that make the company so successful. Costco’s main priority is to benefit their members by creating value for purchasing everyday products and services. Company Description: The company was founded by James Sinegal, current President and CEO of Costco, and Jeffrey Brotman, Chairman of the Board of Directors. In October of 1993 Costco merged with a company called Price Club to form Price/Costco, Inc. Price Club was the first company to establish the concept of a membership warehouse. In 1999, the company changed its name to Costco Wholesale Corporation and moved back...
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...Costco Corporation By: Tiffany Cosby Professor Aleakhue Yekpabo Human Resource Management 01/24/2014 I decided to research and write about Costco warehouse. I can relate to this company because my husband is employed there and it has become one of my favorite stores. Costco has the best prices. It is a membership warehouse club, providing its members with the best possible prices on brand name quality merchandise is one of their priorities. They offer a refund on membership if a customer is not satisfied and will guarantee satisfaction on every product or your money back. This says a lot about the brand of the company. The founder of Costco Sol Prince stated that his secret is to sell things as cheap as possible. Since resuming the name Costco in 1997, the company has grown worldwide with total sales in recent fiscal years exceeding $64 billion (Costco). As of December 2013, the Company operated a chain of 648 warehouses in 43 states, Washington D.C., and Puerto Rico (461 locations), nine Canadian provinces (87 locations), Mexico (33 locations), the United Kingdom (25 locations), Japan (18 locations), Taiwan (ten locations), Korea (nine locations), and Australia (five locations). The company's online business operates websites in the U.S., Canada , U.K, and Mexico. The membership format is designed to reinforce member loyalty and provide continuing fee revenue. Members can utilize their membership at any Costco location in any country. The two types of memberships...
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...TJX Companies was formed which owned BJ's. TJX spun off their "warehouse division," consisting of BJ's and now defunct Home Club, to form Waban, Inc. Later Waban spun off BJ's to become an independent company, headquartered in Natick, Massachusetts. (Scripophily) As of January 30, 2010, BJ's operates 190 BJ's warehouses in fifteen states. (Bjs.com) It employees over 23,500 people (full and part-time.) Today, BJ's common stock is traded on the New York Stock Exchange under the symbol "BJ". The letters B and J are commonly misinterpreted to stand for Berkley and Jensen, which is also a brand name, sold in their stores. In fact, it stands for Beverly Jean, the daughter of one of the company founders. BJ's competitors include Sam's Club and Costco Wholesale clubs. The Company is ranked #232 on Fortune Magazine’s listing of America’s 500 largest public companies. BJ's is traded on the New York Stock Exchange under the symbol "BJ." (bjs.com) BJ Services Mission...
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...Costco Wholesale Corporation is the largest membership warehouse club chain in the world. The company is headquartered in Issaquah, Washington, United States. Costco's first location, opened in 1976 under the "Price Club" name and it was housed in a Quonset shed in San Diego. The company’s one of the kind model serving mostly regions with a large number of small business owners and higher income professionals with a demand for high end goods proved to be the winning formula. Accomplishment encouraged James Sinegal and Jeffrey Brotman to open the first Costco warehouse location in Seattle which is still the company’s flagship location. The new project proved very successful; Costco became the first company ever to grow from zero to $3 billion in sales in less than six years. In 1993, Costco and Price Club merged, forming "PriceCostco." The combined company had 206 locations generating $16 billion in annual sales and created the company's current structure. Costco's web site was first introduced in 1995, and it started conducting e-commerce in 1998 at Costco.com. In 1997, PriceCostco changed its name back to Costco, under which the company currently operates. Costco has also changed the site of its corporate headquarters from Kirkland, Washington, to Issaquah. As of December 18, 2009, Costco has 566 locations: 413 in forty U.S states and Puertorico, 77 in Canada, 32 in Mexico (joint venture with Comercial Mexicana), 21 in United Kingdom, 9 in Japan, 7 in South Korea, 6 in Taiwan...
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...Overview: Costco was founded by Jim Sinegal and Jeffrey Brotman. Costco opened its first warehouse in Seattle, Washington, on September 15, 1983. Siegal had started in wholesale distribution by working for Sol Price at both FedMart and Price Club. In 1993, Costco merged with Price Club. Costco’s business model and size were similar to those of Price Club. In 1997, PriceCostco changed their name to Costco Wholesale and all the Price Club locations were rebranded to Costco. Costco was the first company in the industry to grow from zero to $3 billion in sales in less than six years. Costco use the competitive strategy the best-cost provider in the wholesale club membership category. Costco has the purchasing power, high sales volumes, quick inventory turnover, and excellent customer service. The chief elements of Costco strategy are pricing, limited product selection and what the company calls “treasure-hunt merchandising, this is high end product that is acquired in the gray market from other wholesalers or distressed retailers looking to get rid of excess or slow-selling inventory. 1. What is Costco’s business model? Is the company’s business model appealing? Why or why not? The business model that Costco employs is that they are able to provide quality goods and services at the lowest possible prices. This business model is appealing as it firstly, allows Costco to generate high sales volume and rapid inventory turnover by offering members very low prices and select private-label...
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...stoAnnual Report 2010 2010 year ended august 29, 2010 THE COMPANY Costco Wholesale Corporation and its subsidiaries (“Costco” or the “Company”) began operations in 1983 in Seattle, Washington. In October 1993, Costco merged with The Price Company, which had pioneered the membership warehouse concept, to form Price/Costco, Inc., a Delaware corporation. In January 1997, after the spin-off of most of its non-warehouse assets to Price Enterprises, Inc., the Company changed its name to Costco Companies, Inc. On August 30, 1999, the Company reincorporated from Delaware to Washington and changed its name to Costco Wholesale Corporation, which trades on the NASDAQ under the symbol “COST.” As of December 2010, the Company operated a chain of 582 warehouses in 40 states and Puerto Rico (425 locations), nine Canadian provinces (80 locations), the United Kingdom (22 locations), Korea (seven locations), Taiwan (six locations, through a 55%-owned subsidiary), Japan (nine locations) and Australia (one location), as well as 32 warehouses in Mexico through a 50%-owned joint venture. CONTENTS Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Letter to Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Map of Warehouse Locations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...
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...American Warehouse Clubs: Costco Wholesale Club vs. BJ’s Wholesale Overview Costco and BJ’s are both wholesale stores. They offer a variety of products sold in case lots, furniture, food, household products, clothing, books, DVD’s, and many other bulk products. They limit their products to brand names and store product names. They offer bulk items at a lower cost than a typical grocery store. They are kept in warehouse stores which cost the companies less with cheaper shelving and store lighting fixtures. Low operating costs allows these wholesalers to charge much lower prices. These warehouses are very attractive for business owners, caterers and non profit organizations. They can get their products of greater quantity at a much lower cost. There are more than 1250n warehouses in Mexico, Canada and the U.S. 56% percent of them alone are in the United States. These warehouses have competed with Kohl’s, Target, Office Depot, Best Buy and Wal-Mart to name a few. The first warehouse was introduced by Sol Price in San Diego California in 1976. They lost money in their first year of operation but by 1979 had 2 stores. Before then they experimented with a retailer called Fed-Mart. Jim Sinegal who is the cofounder and CEO of Costco worked for Fed-Mart as a teenager. When Sinegal was 26 Sol Price made him the manager of the original store in San Diego. The first Costco store opened in 1983 the same year Sam’ Club opened. By 1984 there were 9 Costco stores with 200,000 members...
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...Factors on Marketing Decisions of Costco Wholesale Corporation Environmental factors consist of all the factors and activities which have a considerable impact on the running of the business. Environmental factors have a powerful impact on the normal functioning of the any business, especially in the marketing decisions (Pagell & Halperin, 2000). These factors pose challenges and threats to the success of any business. In order to deal with such environmental factors a firm should enhance its core competencies and make sound strategies (Staff, 2009). There are various factors which would have deep impact on these new services offered by the firm. The firm should make a strategy after considering these factors. David Jobber describes in his book that with the help of this analysis, the company becomes more competitive and effective to implement the various strategies (Jobber, 2001). Costco Wholesale Corporation is one of the biggest organizations in the retail industry, which operates at the global level. The company was founded by James Sinegal and Jeffrey Brotman (Costco Wholesale Corporation, 2009). On the basis of the sales volume, the company is considered among the world's largest membership warehouses (Costco: About Company, 2009). The company has taken the position of the five largest companies in the United Sates in retail Industry. The Headquarter of the company is situated at Issaquah (Washington) in the United States (Costco Wholesale Corporation Reports...
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