...Case Study Analysis 1: Costco Wholesale Corp: Mission, Business Model and Strategy MGMT 670: Strategic Management Capstone June 26, 2011 Business Case Study: Costco Wholesale Corporation Introduction As a student in MGMT 670: Strategic Management, the capstone course for the Management track at the University of Maryland University College, I was asked to prepare a case study analysis of Costco Wholesale Corporation. Costco is one of the world’s leading wholesale retailers with annual sales of $76.3 Billion for fiscal year (FY) 2010, which is an increase of 9% from the previous year ($69.9 billion). In addition, its earnings per share increased to $2.92, an annual increase of 18% from the previous year. (Costco Financial Report, 2011) This increase is an all time high for the company thereby solidifying its place as a leader in the wholesale industry. Costco and its Business Strategy From inception, Costco’s business strategy has been to offer limited products (4000) at lower prices coupled with great values while keeping overhead costs low. In its main product line Costco has about 3,000 products that are present in the stores at all times and 1000 products that are ever-changing. These 1000 lines allow Costco buyers/merchandisers to hunt for items that will keep customers coming back to see what is new or fresh in the stores. These items help Costco create the “treasure hunt” environment that will keep customers coming back to the store more frequently. The motivation...
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...ASSIGNMENT QUESTIONS: Costco Wholesale Corp.: 1. What is Costco’s business model? Is the company’s business model appealing? Why or why not? Costco business model is meant to maximize efficiency by depending on a high sales tied with quick inventory earnings. Costco’s concept is base on offering members the lowest price on a limited selection of national brands, the warehouse format maintain a low cost rate as they buy and sell items in bulk. Costco memberships keep customers loyal, because it accumulate most of its profit from membership fees, they’re able to sale their goods at a very low markup price. Overall Costco’s business model is very appealing, while being positioned to grow its business for the foreseeable future, it has many benefits. Example, efficiency inventory combine with quicker inventory turnover will reduce Costco cots of selling goods. High sales volumes combine with quick inventory allows Costco to sell and receive cash for goods before it has to pay for any of its merchandise, which allows Costco to finance a large percentage of its inventory through the payment terms provided by its vendor rather than having to maintain a sizable working capital to pay for its merchandise. It’s high end target product result in bringing in high-end consumer into its stores which is another reason it’s appealing. 2. What are the chief elements of Costco’s strategy? How good is the strategy...
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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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...Corporation, was preparing for the November meeting of the Capital Expenditure Committee (CEC). Scovanner was one of five executive officers who were members of the CEC (Exhibit 1). On tap for the 8:00 a.m. meeting the next morning were 10 projects representing nearly $300 million in capital-expenditure requests. With the fiscal year’s end approaching in January, there was a need to determine which projects best fit Target’s future store growth and capital-expenditure plans, with the knowledge that those plans would be shared early in 2007, with both the board and investment community. In reviewing the 10 projects coming before the committee, it was clear to Scovanner that five of the projects, representing about $200 million in requested capital, would demand the greater part of the committee’s attention and discussion time during the meeting. The CEC was keenly aware that Target had been a strong performing company in part because of its successful investment decisions and continued growth. Moreover, Target management was committed to continuing the company’s growth strategy of opening approximately 100 new stores a year. Each investment decision would have long-term implications for Target: an underperforming store would be a drag on earnings and difficult to turn around without significant investments of time and money, whereas a top-performing store would add value both financially and strategically for years to come. Retail Industry The retail industry included a myriad of different...
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...of America's most successful retail giants generating about ROI was 18.6% and 19.2% for fiscal 2012 and 2011, respectively. (Wal-Mart Annual Report, 2012). It is well know as the leader in thinking outside the box, anticipating market opportunities and executing effective strategies to capitalize on them. It has over 10,800 stores worldwide. Businesses have to face the challenge of too many competitors, partly originated by the globalisation, all competing for same objective of making highest profit. So, increasingly companies are not merely asking themselves the management question of ‘Are we doing the right?’ but are having to regularly ask ‘Are we still doing it right?’ They have been seeking a more holistic means of doing this than traditional means of delivering products and services to the customers. In a volatile world, decision makers need options on the future and the ability to change direction as strategic opportunities. Although, business as usual (BAU) performance change is providing a short term success but they are typically faced with a less than perfect processes to make investments. In this case analysis, we are trying to summarise the current situation facing the firm by analysing the general environment, industry, competitor, swot analysis with the recommendation and conclusion. 2.0 External Environmental Analysis Wal-Mart is a household name in the retailing industry. It is one of the few companies that have managed to...
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...shutting down small town, family owned businesses when they move into an area? • Problem 2 – How can Wal-Mart avoid losing American suppliers to foreign country suppliers? History Wal-Mart Stores (Wal-Mart) was established in 1962 when Sam Walton, who had operated stores in Arkansas and Missouri, decided to open a discount store. The company went public and was traded over the counter in 1970, before being listed on the New York Stock Exchange in 1972. Wal-Mart diversified into grocery (Wal-Mart Supercenters), international operations, and membership warehouse clubs (Sam’s Clubs) during the 1980s. In 1983, the company opened Sam’s Wholesale Club, a concept based on the successful cash-and-carry, membership-only warehouse format pioneered by the Price Company of California (now Costco Wholesale Corporation) In 1992 Wal-Mart started expending to the international market, they entered Mexico in 1992 through...
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...Annual Report 2012 2012 YEAR ENDED SEPTEMBER 2, 2012 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 Global Select Market under the symbol “COST”. As of December 2012, the Company operated a chain of 622 warehouses in 41 states and Puerto Rico (448 locations), nine Canadian provinces (85 locations), Mexico (32 locations), the United Kingdom (23 locations), Japan (13 locations), Korea (nine locations), Taiwan (nine locations, through a 55%-owned subsidiary) and Australia (three locations). The Company also operates Costco Online, electronic commerce web sites, at www.costco.com (U.S.), www.costco.ca (Canada), and www.costco.co.uk (United Kingdom). CONTENTS Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Letter to Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...
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...National Competitiveness of Japan ABSTRACT: Japan is the third largest economy. It had been so successful and competitive before 1990. It has been in stagnation for two decades. This paper is going to examine if Japan still retains her national competitive advantage and as an attractive place for MNE from different internal analysis. There will be suggestions of how Japan can improve her international competitiveness. INTRODUCTION Japan had experienced tremendously economic growth after World War II until 1980s. Nikkei stock market index has experienced a high hit of 40,000 in Year 1989. After the appreciation of yen, mistakes in fiscal policy and a serious bubble economy in 1990s, Japan fell into recession for more than two decades. To make it worse, the economic crisis in 2008 and March 11, 2011 earthquake and tsunami in Japan were a great hit to the economy. A decline in exports and increase in imports, especially fuels and energy, made Japan has to face trade deficit and how to increase its international competitiveness. There were some signs of recovery from 2012, especially with Shinzo Abe became the Prime Minister and implemented “The Three arrow”, which is a series of fiscal, monetary policy and structural reforms, so called “Abeconomics”. The PEST model which macroeconomic environment will be analyzed and see whether it is attractive for MNE come to Japan. From Porter’s Diamond model, how Japan can increase its national competitiveness will be further discussed...
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...EXAMINING THE CRACKS IN THE CEILING: A Survey of Corporate Diversity Practices of the S&P 100 March 2013 Table of Contents FOREWORD ....................................................................................................... 1 EXECUTIVE SUMMARY ................................................................................. 2 EXAMINING THE 10 KEY INDICATORS .................................................... 7 1. Equal Employment Opportunity (EEO) Policy ........................... 8 2. Internal Diversity Initiatives ...........................................................10 3. External Diversity Initiatives ..........................................................12 4. Scope of Diversity Initiatives...........................................................13 5. Family-Friendly Benefits....................................................................14 6. EEO-1 Disclosure ..................................................................................15 7. Highest-Paid Executives ...................................................................16 8. Board Representation .......................................................................18 9. Director Selection Criteria ...............................................................20 10. Corporate Commitment ................................................................21 DIVERSITY SCORES BY SECTOR ................................................................22 CONCLUSIONS AND NEXT STEPS...
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...Harvard Business School 9-794-024 Rev. August 6, 1996 DO Wal*Mart Stores, Inc. In Forbes magazine’s annual ranking of the richest Americans, the heirs of Sam Walton, the founder of Wal*Mart Stores, Inc., held spots five through nine in 1993 with $4.5 billion each. Sam Walton, who died in April 1992, had built Wal*Mart into a phenomenal success, with a 20-year average return on equity of 33%, and compound average sales growth of 35%. At the end of 1993, Wal*Mart had a market value of $57.5 billion, and its sales per square foot were nearly $300, compared to the industry average of $210. It was widely believed that Wal*Mart had revolutionized many aspects of retailing, and its was well known for its heavy investment in information technology. David Glass and Don Soderquist faced the challenge of following in Sam Walton’s footsteps. Glass and Soderquist, CEO and COO, had been running the company since February 1988, when Walton, retaining the chairmanship, turned the job of CEO over to Glass. Their record spoke for itself—the company went from sales of $16 billion in 1987 to $67 billion in 1993, with earnings nearly quadrupling from $628 million to $2.3 billion. At the beginning of 1994, the company operated 1,953 Wal*Mart stores (including 68 supercenters), 419 warehouse clubs (Sam’s Clubs), 81 warehouse outlets (Bud’s), and four hypermarkets. During 1994 Wal*Mart planned to open 110 new Wal*Mart stores, including 5 supercenters, and 20 Sam’s Clubs, and to expand...
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...1 History & Global Presence Walmart, which is considered the largest international discount retail chain, was founded by a man named Sam Walton. He first opened a store by the name of “Walton’s 5 & 10” in 1950. When the store became successful he wanted to go bigger which prompted him to open the first Walmart in 1962 in Rogers, Arkansas. Walton wanted to have a store which offered low prices and still quality products. A lot of people doubted him and didn’t think he’d be too successful. They thought his low prices wouldn’t gain him enough profit to stay afloat. By 1967, only 5 years after opening the first Wal-mart, Walton owned 24 stores. The company went public in 1970 and by 1988 it was the most profitable retailer in the US. In March of 1992 Walton was awarded with the Presidential Medal of freedom by President George H. W. Bush. The Presidential Medal of Freedom is the highest civilian award of the United States and it recognizes “exceptional meritorious service.” (infoplease.com) Not even a full month afterwards, Walton passed away on April 5, 1992 of cancer. His oldest son then took over as chairman of the the corporate board of directors. In 2000 Wal-mart.com was founded for US Customers to be able to buy products online. Wal-mart now operates stores in all 50 US States and Puerto Rico. Walmart now has Supercenters, discount stores and neighborhood markets which all vary in size. When finding out so much information about Sam Walton and the history of Walmart I...
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...CENTER FOR INFORMATION SYSTEMS RESEARCH Sloan School of Management Massachusetts Institute of Technology Cambridge Massachusetts 7-ELEVEN Japan Co., Ltd.: Reinventing the Retail Business Model Kei Nagayama and Peter Weill January 2004 CISR WP No. 338 and MIT Sloan WP No. 4485-04 2004 Massachusetts Institute of Technology. All rights reserved. Research Article: a completed research article drawing on one or more CISR research projects that presents management frameworks, findings and recommendations. Research Summary: a summary of a research project with preliminary findings. Research Briefings: a collection of short executive summaries of key findings from research projects. Case Study: an in-depth description of a firm’s approach to an IT management issue (intended for MBA and executive education). Technical Research Report: a traditional academically rigorous research paper with detailed methodology, analysis, findings and references. About the Center for Information Systems Research CISRMISSION CISR was founded in 1974 and has a strong track record of practice based research on the management of information technology. As we enter the twenty-first century, CISR’s mission is to perform practical empirical research on how firms generate business value from IT. CISR disseminates this research via electronic research...
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...Sears Canada, Inc. (SCC) - Financial and Strategic Analysis Review Reference Code: GDRT32835FSA 290 Yonge Street, Suite 700 Toronto, ON M5B 2B8 Canada Phone Fax Website Exchange +1 416 3621711 +1 416 9414793 www.sears.ca SCC [Toronto Stock Exchange] Revenue Net Profit Employees Industry Publication Date: AUG 2010 5,201 (million CAD) 290.70 (million CAD) 11,240 Retailing Company Overview Sears Canada Inc. (Sears) is a multi-channel retailer. The company engages in providing a variety of merchandise ranging from apparels to electronics to house wares. Its product line includes apparels, footwear, jewellery, home improvements, furniture, appliances, electronics and several others. The company offers its merchandise through specialty stores, including department stores, outlet stores and other store formats; catalog and website. It offers various private label and national brands. Sears is also engaged in real estate business through joint venture interest in shopping centers. The company principally operates in Canada and is headquartered in Toronto, Canada. Key Executives Name William C. Crowley Dene L. Rogers Deidra D. Cheeks Merriwether R. Raja Khanna Jon Lukomnik Chairman Chief Executive Officer Director Director Director Title SWOT Analysis Sears Canada, Inc., SWOT Analysis Strengths Weaknesses Strong Foothold in Canada Specialized Services Declining Market Share Dependency on Leased Properties Source: Annual Report, Company Website, Primary and Secondary Research...
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...9-705-448 REV: NOVEMBER 2, 2005 GIOVANNI GAVETTI REBECCA HENDERSON SIMONA GIORGI Kodak and the Digital Revolution (A) In February 2003, Daniel A. Carp, Kodak’s CEO and chairman, reviewed 2002 sales data with Kodak’s senior executives. Film sales had dropped 5% from 2001 and revenues were down 3%. 2003 did not look any brighter: Carp expected revenues to grow only slightly and net income to remain flat or decrease (see exhibit 1 for information on Kodak’s financial performance and exhibits 2 and 3 for information on sales of cameras and film rolls in the United States). The film industry was “under pressure unlike ever before.” Carp predicted a “fairly long downturn”1 for traditional photography sales as consumers turned to digital cameras, which did not require film. Kodak was moving more of its manufacturing to China, where it could boost film sales, and was planning to slash 2,200 jobs, or 3% of its work force, especially in the photo-finishing business. Carp had received a master’s in business from MIT. He had begun his career at Kodak in 1970 as a statistical analyst. Since then, he had held a variety of positions at Kodak. In 1997, he became president and COO, and was appointed CEO on January 1, 2000. He believed Kodak’s current struggle was one of the toughest it had faced. How could he use digital imaging to revitalize Kodak? Kodak, 1880-1983: A brief history In 1880, George Eastman invented and patented a dry-plate formula and a machine for preparing large...
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...S T R A T E G Y – II S T R A T E G Y – II S T R A T E G Y – II S T R A T E G Y – II www.ibscdc.org 1 Transformation Corporate Transformation Korean Air: Chairman/CEO Yang-Ho Cho’s Radical Transformation A series of fatal accidents, coupled with operational inefficiencies snowballed Korean Air into troubled times. Then, at the beginning of the 21st century, its CEO/ Chairman, Yang-Ho Cho undertook various transformation initiatives - for instance, improving service quality and safety standards, technology integration, upgrading pilot training, better business focus; putting in place a professional management team, improving corporate image through sponsorship marketing, etc. He gave a new corporate direction in the form of '10,10,10' goal. However, Korean Air is held up by a slew of challenges. Among which are inefficiencies of - Chaebol system of management, possible clash of its cargo business with its own shipping company, limited focus on the domestic market and growing competition from LCCs. How would Korean Air manage growth as a family-owned conglomerate? The case offers enriching scope for analysing a family business’s turnaround strategies, with all the legacy costs involved. Pedagogical Objectives • To discuss the (operational) dynamics of Korean Chaebols - their influence/ effects on the country’s industrial sector and the economy as a whole • To analyse how family-owned businesses manage the transition phase - from a supplier-driven economy to a demanddriven...
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