Costco Report 2012

Topics: Costco, Sam's Club, Warehouse club Pages: 13 (4710 words) Published: December 17, 2012
Professor: Wayne Forrester
Class: Business 481
Semester: Fall 2012
Section: E

Company Report: Costco
1. Dameon Jame Background
2. Chandra Willie Mission/Code of Ethics
3. Brian Sanichar Strategy
4. Gopal Mohan Marketing Strategy
5. Anwar Rahman Financials
6. Airon Melo Financials/Competition
7. Sohani Somai Current Status of Costco
8. Kyle Hecter Recommendations

Dameon James Background
Costco Wholesale Club wasn’t always the wholesale club company that generated $71 billion dollars in 2008 as well as having 544 warehouses in 40 states; Like any other company, Costco was a blueprint waiting to dominate the wholesale industry. The Person that came up with the membership warehouse concept was Sol Price. The very 1st price club per say was conducted in San Diego California on Morena boulevard at an airplane hangar in 1976. Sole Price started to experiment with discount retailing called Fed-Mart and that is where future CEO Jim Sinegal got his start as he was employed at the fed-mart loading mattresses earning only an abysmal $1.25 an hour while attending San Diego Community College at the same time. Soon after that, Price decided to sell away fed-mart to focus more on his new empire, which was the San Diego Price Store in which Jim Sinegal tailgated with him to help him build that empire. This proved to be a successful move as within the next few years, the Sol Price club stores rose to the top of the list as the number one leader in member warehouse retailing and the most intriguing thing about this is that it has gained success by mainly operating in the west coast. As Price was figuring ways to maintain success and gain more profit. One of the strategies was realizing that since local small business members needed the products at reasonable prices, Price figured that he can have a surplus in sales as well as gaining buying clout from suppliers by giving a club membership to everyday consumers. This strategy was the one that helped the company excel. Coming back to Jim Sinegal, Sol Price promoted Sinegal to store manager at the original San Diego Store to restore its profitability. This was a corner stone move because Price identified Sinegal’s Talent and intelligence for discount retailing and knowing what prices certain merchandises should be sold for and listed and also what the stores weren’t doing right. Price knew the things that Sinegal Knew as well but it was as if he sent him on a mission and completed it. Over the next few years due to following his mentor Sol Price, in terms of stocking items that moved excessively and charging low prices that the consumer buys frequently, Sinegal made the decision to leave Price Club wholesale to start his own endeavor and start his very own warehouse club. To start off with this, Sinegal collaborated with Jeff Brotman (future chairman) who was a Seattle entrepreneur to help form Costco. The very 1st Costco that opened up for business was in Seattle of 1983 ironically the same year Wal-Mart launched its warehouse membership strategy Sams Club. The numbers for Costco increased over the next couple of years in stores, members and sales with 9 in 1984, 200,000 in 1985 and $1 billion in which Costco was the first company in the U.S to do so in less than 6 years. Years later in 1993, Costco merged with Price Club and after the merger, Sinegal became CEO covering over 206 PriceCostco locations in which accumulated $16 billion in annual sales to that point. Jeff Brotman served as the Vice chairman for PriceCostco for a year and then elevated to chairman by 1994. Brotman focused more on the company’s real estate operations and land throughout the years. By 1997, PriceCostco then became Costco Companies Inc. That was the brand name for two years until the company moved its headquarters from Delaware to Washington in which it was finally changed to as we know now, Costco Wholesale Corporation.

Chandra Willie Mission/Code of Ethics
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