University Name: MGT603 Analysis of System Thinking

This report provides an analysis of the system thinking approach, focusing on its application to business and operational management. The analysis uses Costco Wholesale as a case study, examining the company's entry into the organic products market and the associated challenges. The report identifies key issues such as ensuring product quality, finding reliable suppliers, and optimizing logistics to reduce product waste. It emphasizes the importance of considering various interconnected systems, including producers, logistics services, and consumers, to develop effective problem-solving strategies. The report suggests that Costco should invest in organic producers to have more control over food quality and build mutually beneficial relationships. The report also references various academic sources that support the concepts of systems thinking and its application in business contexts.

Running head: ANALYSIS OF SYSTEM THINKING
ANALYSIS OF SYSTEM THINKING
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1ANALYSIS OF SYSTEM THINKING
Analysis of system-thinking approach:
System thinking refers to process of application of strategies that helps in obtaining optimal
solution for a problem associated with a complex system. It identifies various systems that
are associated with that complex system and connects every system in such a way that
ensures optimal flow of each of these systems required for effective problem solving
approach. Therefore, system thinking plays an important role in business and operational
management for obtaining solution to issues that is affecting business process. However, in
order to apply system thinking approach in problem solving, it is essential to analyse problem
in details as it provides comprehensive overview regarding strategies required for this to
ensure that application of system thinking is effective and efficient as well.
In this context for analysing system thinking approach, the organization that is identified is
Costco wholesale, one of the largest whole sale retailer in the world, offering products in
various categories. As a part of its business strategy to diversify its product offerings, it has
decided to enter into organic products market. There has been a significant demand for
organic product among consumers as it is healthy and helps in consumer fitness goal.
Although there are various companies that are offering organic products, price and quality of
products are two of the main issues identified in the market. Therefore, it is a significant
opportunity for reputed company like Costco to enter into this market and capitalize on
consumer loyalty and brand reputation.
However, as it entered into this market, various issues are identified regarding its business
and these issues are described in details in this context. One of the most important issues that
is identified is to provide best organic products to its consumers. It was identified by this
organization that in order to enhance shopping experience, quality of product is of prime
importance. Therefore, it is required to identify strategy to ensure that products that are being

2ANALYSIS OF SYSTEM THINKING
sold to consumers have no quality issues. Otherwise it will affect brand reputation and
consumer satisfaction as well. One of the most significant problem therefore is to find
suppliers who are not only reliable, but will offer quality organic products as well. Another
important issue is to enhance quality of logistic services to reduce delay in taking products
from suppliers to store. For this delay, many products are being wasted before it is offered to
consumers.
It requires as effective system thinking approach to resolve this issue. First of all Costco
needs to invest in organic producers as it will provide them significant control over food and
also ensure that quality of products are being affected before it is offered to consumers. For
this it is important to ensure relationship with its producers that is mutually beneficial. It will
also help Costco to enhance capital relationship with not only suppliers, but also with its
consumers as well. Therefore, some of the required system that needs to be considered are
producers who will produce products, logistic services that will deliver this products to
various stores and consumers who will purchase these products as well.

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References:
Barreto, L., Amaral, A., & Pereira, T. (2017). Industry 4.0 implications in logistics: an
overview. Procedia Manufacturing, 13, 1245-1252.
Liedtka, J. (2018). Why design thinking works. Harvard Business Review, 96(5), 72-79.
Petrov, V. (2019). System Approach. In TRIZ. Theory of Inventive Problem Solving (pp. 35-
49). Springer, Cham.
Sacco, P., Gallo, R., & Mazzetto, F. (2019). Farm Ontology: a System Thinking approach for
planning and monitoring farm activities. POLI. design.
Three Examples of Systems Thinking in Action. (2020). Retrieved 3 March 2020, from
https://www.linkedin.com/pulse/three-examples-systems-thinking-action-mary-adams