Assignment on Leadership in Business Organization
Added on - 21 Apr 2020
Running head: LEADERSHIP IN BUSINESSLeadership in BusinessName of the studentName of the UniversityAuthor Note
1LEADERSHIP IN BUSINESSIntroductionCostco is a membership warehouse club, it helps in giving to the members thebest prices and quality branded merchandise products. Jim Sinegal founder of Costcodefined the company’s goals as, giving the customer the best value” in price andproduct. Costco, has various stores located worldwide, it provides a wide collection ofmerchandise. It has convenient speciality department which gives exclusive servicesto members for services such as health, investments, mortgages, travel, automobile,and many more. Costco is thus a retailer with a multi-billion dollar retails locatedthroughout many of the Countries (Flammer, 2015).Despite Costco’s impressive size, it consistently provides an atmosphere inwhich employees thrive, and shopping experience exceeds the need of customers.Topic: Business of CostcoSource: (Kaufman, 2015).
2LEADERSHIP IN BUSINESSSuccess of Costco in terms of the following determinants and relate it to1.Employee CommitmentCostco primary marketing object is to provide its members with a memorableshopping experience. They aim to provide a wide range of quality merchandise at aprice that it consistently lower than its competitors – a strategy that will lead toincreased membership and revenue. Costco’s advertising is limited to spending bygiving coupons to existing membersThe CEO maintains a good lasting relationship with all their employees’customers and vendors. The vendors have their products stocked at Costco; in largeresult to the massive number of units Costco is able to sell. (Hill, Jones & Schilling,2014).The employee turnover rate of the employee of the company is very low. Thecompany maintains a low cost and high wages. The organization is focused that theproductivity of both the employees and the asst is very crucial and it reduces theiroperating cost. They have dedicated their efforts to eliminate those which hamper theemployee productivity therefore it increases a high level of employee commitmenttowards he organization and values.The short duration of working hours that is from 10am in the morning till 8.30 pmat night. Their minimal over- and under-stocks saves labour.In the US, the retail isclosed on seven holidays that is on New Year's Day, Easter; Memorial Day, July 4th,Labour Day, Thanks giving day and Christmas which serveas a employee benefit andit makes them sustain and committed towards the organization (Huddleston etal.,2016).Costco is committed to promoting from within the company. The majority of theircurrent management team members are home grown. It therefore helps theorganization for ample opportunities for personal and career growth.2.Strategic Management
3LEADERSHIP IN BUSINESSStrengthsPricing: Costco’s greatest strength is its ability to provide quality products lowpricing to its members. This strength direction corresponds to the customer loyalty.Costco’s product and pricing mix, increases satisfaction, as well as the number ofreturn and new customers. Costco has its gasoline business which draws the membersto the warehouses; their gas prices are consistently lower than their competitions.Brand Loyalty:Costco has constantly offered to its customer’s high-qualitymerchandise at a low price that attracted loyal customer base. This helps the companyto grow in its market share in the thereby helping to increase their customer basethroughout the years.WeaknessCostco’s performance is largely dependent on the sales and revenue in NorthAmerica. In 2014, the sales of U.S. and Canada are 87% of Costco’s sales total. Thecompany is dependent on the sales in California, which is 32% of sales for the UnitedStates. As a result, a significant decreased in sales in California could significantlyand negatively impact the company’s sales (Brea‐Solís, Casadesus‐Masanell &Grifell‐Tatjé, 2015).OpportunitiesCostco plans to expand domestically and internationally. Costco currently has671 warehouses. In the next few years, however, Costco anticipates opening 30-35new warehouses, with the majority being location internationally. Recently, Costcoexpanded into Spain; plans to expand into France are underway.ThreatsAs previously mentioned, the warehouse industry is very competitive. Theypose a threat to Costco, and force Costco to keep their prices competitive. Internetretailers like Amazon, while not direct competitors of Costco, offer a wide range oflow-cost product and free shipping options that are hard to beat.The Kirkland’s brand offers a wide variety of products and fiercely competeswith top-brands, by offering a comparable product 10- 20% cheaper (Boone & Kurtz,2013).Costco receives bulk merchandise directly from the manufacturer before they arerequired to pay for them. This factor allows for minimal mark-up in pricing.