Sam's Club and Costco Wholesale Corporation

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Strategia aziendale - Formulazione ed esecuzione Arthur A. Thompson, A. J. Strickland III, John E. Gamble

Copyright © 2009 - The McGraw-Hill Companies srl

Case

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Costco Wholesale Corporation: Mission, Business Model, and Strategy he was prone to display irritation when he disagreed sharply with what people were saying to him. In touring a Costco store with the local store manager, Sinegal was very much the person-in-charge. He functioned as producer, director, and knowledgeable critic. He cut to the chase quickly, exhibiting intense attention to detail and pricing, wandering through store aisles firing a barrage of questions at store managers about sales volumes and stock levels of particular items, critiquing merchandising displays or the position of certain products in the stores, commenting on any aspect of store operations that caught his eye, and asking managers to do further research and get back to him with more information whenever he found their answers to his questions less than satisfying. It was readily apparent that Sinegal had tremendous merchandising savvy, that he demanded much of store managers and employees, and that his views about discount retailing set the tone for how the company operated. Knowledgeable observers regarded Jim Sinegal’s merchandising expertise as being on a par with that of the legendary Sam Walton. In 2006, Costco’s sales totaled almost $59 billion at 496 stores in 37 states, Puerto Rico, Canada, the United Kingdom, Taiwan, Japan, Korea, and Mexico. About 26 million households and 5.2 million businesses had membership cards entitling them to shop at Costco, generating nearly $1.2 billion in membership fees for the company. Annual sales per store averaged about $128 million, nearly double the $67 million figure for Sam’s Club, Costco’s chief competitor in the membership warehouse retail segment.

Arthur A. Thompson Jr.
The University of Alabama

J

im Sinegal, cofounder and CEO of Costco Wholesale, was the driving force behind Costco’s 23-year march to become the fourth largest retailer in the United States and the seventh largest in the world. He was far from the stereotypical CEO. A grandfatherly 70-year-old, Sinegal dressed casually and unpretentiously, often going to the office or touring Costco stores wearing an opencollared cotton shirt that came from a Costco bargain rack and sporting a standard employee name tag that said, simply, “Jim.” His informal dress, mustache, gray hair, and unimposing appearance made it easy for Costco shoppers to mistake him for a store clerk. He answered his own phone, once telling ABC News reporters, “If a customer’s calling and they have a gripe, don’t you think they kind of enjoy the fact that I picked up the phone and talked to them?”1 Sinegal spent much of his time touring Costco stores, using the company plane to fly from location to location and sometimes visiting 8 to 10 stores daily (the record for a single day was 12). Treated like a celebrity when he appeared at a store (the news “Jim’s in the store” spread quickly), Sinegal made a point of greeting store employees. He observed, “The employees know that I want to say hello to them, because I like them. We have said from the very beginning: ‘We’re going to be a company that’s on a first-name basis with everyone.’ ”2 Employees genuinely seemed to like Sinegal. He talked quietly, in a commonsensical manner that suggested what he was saying was no big deal.3 He came across as kind yet stern, but

Copyright © 2007 by Arthur A. Thompson. All rights reserved.

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Strategia aziendale - Formulazione ed esecuzione Arthur A. Thompson, A. J. Strickland III, John E. Gamble

Copyright © 2009 - The McGraw-Hill Companies srl

Case 1

Costco Wholesale Corporation: Mission, Business Model, and Strategy

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COMPANY BACKGROUND
The membership warehouse concept was pioneered by discount merchandising sage Sol Price, who...
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