Memorandum
To: CEO John Sinegal
Cc: Dr. Birjandi
From: Stephen Collum
Date: 11/29/2009
Subject: Costco’s Business Analysis
Dear John Sinegal,
I’m writing you to give you my analysis of your company Costco. I’m impressed with your managerial skills used during your year-round warehouse visits. Also, the transition from the old workplace to the new workplace is incredible. Last I would like to praise your company’s high employee retention rate.
During your numerous visits to various local Costco warehouses I noticed that you used different managerial skills that exemplify why your company is so successful. Your conceptual skills are displayed as you allow each warehouse to act as their …show more content…
The warehouse managers need technical skills as they make independent merchandising decisions, based on demographics of their area and customer wants/needs. Typically, most managers need the conceptual skills, because they are expected to make decisions guided by the company’s mission and values, in addition to being based on the inventory and sales …show more content…
As stated earlier, Costco has a high employee retention rate, in part because the employees feel empowered. Costco’s employee pay is among the highest among discount retailers and your company offers one of the best health insurance plans available. This has led to a workforce that is productive and loyal. Also, it is in contrast to the old workplace where jobs were less stable and employees had no say-so pertaining to company functions.
Lastly, Costco’s high employee retention rate help the warehouse club maintain low-prices, because it allows the company to keep its overhead costs low. The cost for employee training, recruiting, and so forth can be very expensive. Also, high retention rates make your business run more effectively, because operations tend to run more efficiently with more experienced staff.
In conclusion, you new age business model is marveled and should be applauded. If there were more companies like Costco around America would be a better place, where its citizens would be happy and people would be able to live more prosperous, productive, and happier lives.
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