Costco Organizational Analysis - Spring 2013

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Topics: Costco
Appendix C: Organizational Analysis
Costco Wholesale Corporation

Introduction… The purpose of this Organizational Analysis is to discuss Costco’s current mission and values, provide a snapshot of their existing overall business model and the environment they are working in, and then discuss the key success factors required to succeed in their industry. Beyond that will be an examination of what resources (tangible, intangible, and human) and capabilities (functional and value chain) are needed to deliver on these key success factors, as well as analyze how Costco ‘stacks up’ to the competition in those areas. Finally there will be a discussion of what areas should be either improved or exploited moving forward to give Costco a more distinct competitive advantage (and therefore increased profits) in this industry.
Mission, Values, and Strategy… Costco’s mission, quite simply, is to provide high quality merchandise at the lowest possible prices for its members, in an ethically responsible manner. Below is a copy of their mission statement directly off of the Costco website…
The Mission Statement of Costco Wholesale:

"Costco 's mission is to continually provide our members with quality goods and services at the lowest possible prices. In order to achieve our mission we will conduct our business with the following Code of Ethics in mind:
• Obey the law
• Take care of our members
• Take care of our employees
• Respect our vendors
If we do these four things throughout our organization, then we will realize our ultimate goal, which is to reward our shareholders." Along with their core mission Costco discusses in detail how they comply with the above mentioned code of ethics, and they don’t stop there. One additional example of how important ethical behavior is to them is demonstrated by their “supplier code of conduct” disclosure. In it Costco mentions several acts and behaviors that they prohibit of their suppliers (as well as their



References: Analyst Blog (no author cited). (June 13, 2012). Costco Carries Momentum in 2012. Retrieved Feb 2013 from http://www.investopedia.com/stock-analysis/zacks Cheng, Andrea (April 1, 2010) Reuters (June 29, 2011). BJ’s Sells Itself to Leonard Greene, CVC. Retrieved Feb 2012 from http://www.reuters.com/article/2011/06/29/us-bjswholesale-cvc-idUSTRE75S27L20110629 Reuters (Feb 15, 2013) Simpson, SD. (Dec 13, 2012). A Few Hiccups Aren’t Going To Derail Costco. Retrieved Feb 2013 from http://www.investopedia.com/stock-analysis/2012 Waterman, J Weinstein, J (Aug 18, 2012). Costco: A Value Proposition For Investors And Customers Alike. Retrieved Feb 2013 from http://seekingalpha.com/article/815231 Zwiebach, E

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