Professional Documents
Culture Documents
Case 1 - Costco Wholesale in 2012
Case 1 - Costco Wholesale in 2012
Company Background
The membership warehouse concept was pionnered by discount merchandising sage Sol Price,
who opened the first Price club. Price Club lost $750.000 in its first yeaar of operation, but by 1979 it
had two stores, 900 employees, 200.000 members, and a $1 million profit. Sinegal and Seattle
enterpreuner Jeff Brotman founded Costco, and the first Costco store began operations in Seattle in
1983. In December 1985, Costco became a public company, selling shares to the public and raising
additional capital for expansion. In October 1993, Costco merged with Price Club. Jim Sinegal
became CEO of the merged company, presiding over 206 PriceCostco locations, with total annual
sales of $16 billions. In January 1997, after the spin-off of most of its non-warehouse assets to Price
Enterprise Inc., PriceCostco changed its name to Costco Companies Inc. When the company
reincorporated from Delware to Washington in August 1999, the name was changed to Costco
Wholesale Corporation. In January 2012, Jim informed to step down from CEO of the company. The
Board elected Craig Jelinek to succeed Sinegal and hold the titles of both President and Chief
Executive Officer.
Mission
Numerous company documents stated that Costcos mission in the membership warehouse
business was : To continually provide our members with quality goods and services at the lowest
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Case 1: Costco Wholesale in 2012
Setting Objective
The managerial purpose of setting objectives is to convert the vision and mission into specific
performance targets. Objectives reflect managements aspirations for company performance in light of
the industrys prevailing economic and competitive conditions and the companys internal
capabilities.
The strategic objective is Costco wants to provide the lowest-pricet quality goods and services to the
customer coming back to shop. For the financial objective, Costco enabled to operate profitably at
significantly lower gross margins than traditional wholesalers, mass kmerchandisers, supermarkets,
and supercenters. Company objective can be broken down into performance targets for each of the
organizations seperate business.
Monitoring
Developments,
Evaluating
Performance,
And
Initiating
Corrective Adjustments
Monitoring new external developments, evaluating the companys progress, and making corrective
adjustmentsis the trigger point for deciding whether to continue or change the companys vision and
mission, objectives, strategy, and/or strategy execution methods. Managers are obligated to assess
whioch of the companys operating methods and approaches to strategy execution merit continuation
and which need improvements. Sinegal is an effective CEO as shown by his goals to keep Costco as
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Case 1: Costco Wholesale in 2012
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Case 1: Costco Wholesale in 2012