COSTCO WHOLESALE CORPORATION REPORT CASE

Abstract
Costco Wholesale Corporation was founded by Jim Sinegal and began operations in 1983 in Seattle,
Washington. In October 1993, Costco merged with The Price Company, which had pioneered the
membership warehouse concept in 1976, to form Price/Costco, Inc., a Delaware corporation. Costco
Wholesale Corporation operates an international chain of membership warehouses, mainly under the "Costco
Wholesale" name, that carry quality, brand name merchandise at substantially lower prices than are typically
found at conventional wholesale or retail sources. Members can also shop for private label Kirkland
Signature products, designed to be of equal or better quality than national brands, including juice, cookies,
coffee, tires, etc. The Company also operates self-service gasoline stations at a number of its U.S. and
Canadian locations. According to Jim Sinegal, the Company's President and Chief Executive Officer,
"Costco is able to offer lower prices and better values by eliminating virtually all the frills and costs
historically associated with conventional wholesalers and retailers, including salespeople, fancy buildings,
delivery, billing and accounts receivable. We run a tight operation with extremely low overhead which
enables us to pass on dramatic savings to our members." Costco is open only to members and offers three
types of membership: Business, Gold Star (individual) and the Executive membership. Costco warehouses
generally are open seven days per week for all members. And in August 2010, Costco’s sales totaled almost
$77,9 billion at 582 stores in 72 states making them the fourth largest retailer in the USA and the seventh
largest in the world with annual sales per store average $128million.

Nama Perusahaan : Costco Wholesale Corporation

Lini Bisnis : Costco wholesale corporation merupakan persahaan yang bergerak dalam
industri ritel yang dibentuk oleh jim sinegal dan jeff brotman pada tahun 1983

Konsep : membership warehouse dimana Costco memberikan harga rendah kepada

membernya, dalam setiap barang yang dijual
Distribusi : - Direct from manufacturer
- Cross docking facility (9 distribution point)
Kompetisi : Sam’s Club
Konsep Usaha : menjual barang dagangan dengan keuntungan yang kecil,
memberikan harga murah untuk members

BJ’s Wholesale
Konsep Usaha : menciptakan pengalaman belanja yang menyenangkan bagi
anggota dengan menyediakan bermacam-macam produk yang lebih bervariasi
dibanding pesaing.
Macam-Macam Produk : Branded and private branded product
Payment : tunai, cek, debit card, Amex, private label costco credit card
Target Market : perorangan, kalangan bisni menengah dan eksekutif yang bermukim di
Amerika, Kanada, Inggeris, Jepang, Korea, dan Taiwan
Bisnis Model : Costco ingin menjadi yang utama dalam menawarkan harga yang
paling rendah dengan kualitas terjamin
Problem : Visi yang tidak tertuang secara explicit sehingga akan menjadi permasalahan
dalam enentukan strategi bisnis khususnya untuk menghadapi kompetisi
Case Theoritical Framework Analysis

Phase 1 : Developing a strategic vision

“Costco’s philosophy was to keep customers coming to shop by wowing them with low prices”
 Dari statement tersebut, dapat dilihat bahwa costco ingin menjadi yang utama dalam menawarkan
harga yang paling rendah dengan kualitas yang terjamin.
 Seperti costco, terkadang perusahaan tidak menyebutkan strategic vision-nya secara tertulis, tapi
perusahaan tetap memiliki nilai nilai atau filosofi yang diterapkan dalam kegiatannya.

Phase 2 : Setting objectives

 Strategic objective :Costco wants to provide the lowest-price with quality goods and services to the
customers and keep the customer coming back to shop.
 Financial objective : dengan profit margin yg cukup rendah diharapkan dapat menghasilkan harga
produk yang paling murah, sehingga mempengaruhi peningkatan penjualan.

phase 3 : Crafting a strategy to achieve the objectives and vision

Company’s Strategy-Making Hierarchy

Phase 3 : Crafting a strategy to achieve the objectives and vision (Continue…)

Corporate Strategy : Costco berkomitmen untuk memberikan produk yang berkualitas akan tetapi dengan
harga yang sangat murah
 Business Strategy : Generate high sales volumes and rapid inventory turnover by offering members low
prices on a limited selection of nationally branded and selected private-label
products in a wide range of merchandise categories”
 Functional area strategies within each business
Costco strategies:
- Pricing, provide the lowest price than another retail store.
- Product selection, Costco didn’t want stocked about the items more than 4000 items to
- Make low inventory, eliminating cost, holding and cost handling.
- Treasure-hunt merchandising, Costco provide limited items that will not available for the next time
in the warehouse. According to the Jim Sinegal Costco try to get that sense of urgency in their
customers.
- Marketing & Advertising ( Direct Mail )
Marketing & Promotional activities were generally limited to special campaign for new warehouse
openings, occasional direct mail marketing to prospective new members, and regular direct mail
selected merchandise to existing members.
- Growth Strategy
o Open more new warehouse
o Built an ever larger and fiercely loyal membership base
o Employ well-executed merchandising techniques to induce members to shop at cosco more
often and purchase more per shopping trip.
- Web Site Sales: Costco juga mengembang cara berbelanja melalu internet, mereka mempunyai dua
website untuk melayani pelanggan.  
- Operating strategies within each business
o Manager toko Costco juga diberi kewenangan yang cukup besar untuk mengelola toko seperti
milik mereka sendiri.
o Produk dagangan di beli dari pabrikan dan di distribusikan langsung ke toko atau ke
distribution point baru ke toko dalam waktu kurang dari 24 jam.
o Melakukan pembelian langsung kepada produsen brand name produk nasional (Canon, Casio,
Coca cola, Colgate-Palmolive, Dell, Fuji, HP, Kimberly-Clark, Kodak, Levi’s, Michelin,
Nestle, Panasonic, Samsung, dll)

Phase 4 : Implementing and executing the strategy

The implementing and executing the strategy in costco related to the philosophy, value and code ethics :
 Obey the law.
 The company pledge to comply with all laws and other legal requirements.
 Respect all public officials and their positions. (Etc..)
 Take care of our member.
Costco’s member are the reason for cosco’s being, and the key to costco’s success. The company pledge
to:
 Provide top quality products at the best prices in the market
 Provide high quality, safe and wholesome food products.
 Provide members with a 100% satisfaction guaranteed warranty.
 Take care of our employees.
Employees are the most important asset. And the company pledge to provide the employees with
competitive wages, great benefits, a save and healthy work environment, challenging and fun work,
carrer opportunities, an atmosphere free form harassment of discrimination.
 Reward our stakeholders.
Providing them with a good return on the money they invest in the company.
Phase 5 : Monitoring developments, evaluating performance, and making corrective adjustment

Dalam melaksanakan peran ccontroling Jim Sinegal berkeliling sebanyak 8-10 toko dalam satu hari pada
setiap harinya. Sehingga mempermudah dalam proses menganalisa strategi bisnis di tiap took

Analisis : SWOT Analysis

Strenght :
a. Selected members
b. Take care members
c. Kaderisasi
d. Low prices
e. Accepted merchandise returns
Weakness :
a. Costco building is not fancy
b. Display merchandise is not interesting
c. Limited credit payment
d. Limited customer
Opportunity :
a. Mencoba meningkatkan level segmen pasar
b. Mencoba lebih mengembangkan bisnis di bidang furniture yang merupakan salah satu sumber
pendapatan terbesar
c. Mengembangkan ancillary business
d. Meningkatkan jumlah member dengan cara membuka took baru di tempat lainnya yang
dianggap potensial
e. Jangan hanya menciptakan harga produk yang murah, tapi service yang maksimal untuk
member sehingga member merasa nyaman dalam berbelanja
Threat :
a. Sam’s Club
Konsep Usaha : menjual barang dengan keuntungan yang kecil, memberikan harga murah untuk
Members
b. BJ’s Wholesale
Konsep Usaha : menciptakan pengalaman belanja yang menyenangkan bagi anggota dengan
menyediakan bermaca-macam produk yang lebih bervariasi dibanding pesaing.

Kesimpulan : Costco memilik kelemahan dalam hal visi yang tidak tertuang secara
explicit. Hal itu dapat menjadi permasalahan disaat costco berada di
tangan manajemen penerus dari kepemimpinan Sinegal
Rekomendasi : Visi harus dituangankan secara explicit sehingga memudahkan proses
penentuan strategi bisnis costco itu sendiri.
 COSTCO
WHOLESALE
CORPORATION:
MISSION,
BUSINESS MODEL,
AND STRATEGY

Kelompok 2 :

Agus Ahmad Farid E090261002

Ellys Siregar E090271004
Fanvi Yokananda E090271005
Firly Firmansyah S E090271006
Indah Purnomowati E090271007