BUS 1053 - Corporate Social Responsibility: Costco Canada Report

This report provides a comprehensive analysis of Costco Canada, examining its operations, stakeholders, and the issues it faces. The report begins with an overview of Costco Canada, highlighting its global presence and product offerings. It then identifies and discusses the key stakeholders, including employees, customers, investors, and communities, emphasizing their interests and how Costco addresses them through corporate social responsibility initiatives. The core of the report focuses on the challenges Costco faces, such as technical errors, e-commerce sales impacts, membership reliance, and competition. Finally, the report offers strategic recommendations to overcome these issues, including offering customer discounts, enhancing membership benefits, and adapting to changing consumer preferences. The report concludes by emphasizing Costco's effective CSR practices and the need for strategic adjustments to navigate the competitive Canadian market.

Running Head: COSTCO 0
Management

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Contents
Costco Canada: Overview.....................................................................................................................2
Stakeholders of Costco..........................................................................................................................3
Issues faced by Costco Canada..............................................................................................................5
Recommendations to overcome above issues.......................................................................................5
Conclusion.............................................................................................................................................6
References.............................................................................................................................................7

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Costco Canada: Overview
Costco Canada tends to operate the growing chain of around 400 stores globally by
serving more than 1.2 million customers every day. The supercentres and stores nearly carry
1,20,000 products including apparel, fresh groceries, as well as home décor to grocery, photo
centres, pharmacies, garden centres and electronics. The flagship online store of Walmart is
usually visited by 6,00,000 customers. The commitment of Walmart Canada tends to help
people by saving money and living effectively through commitment by creating opportunities
as well as giving priority to the environment sustainability through lifting communities.
Through the women in retaining program, Costco provides training to the women. The
investment in distribution centres and stores of energy efficiency by reducing the
environmental barriers. In the paper, discussion has been carried on stakeholders of Costco
Canada. Afterwards, issues faced by Costco has been presented by providing some
recommendations to overcome from the above discussed issues.

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Stakeholders of Costco
1. Employees: Costco considers employees as the most significant stakeholder. It is
because employees directly affect the performance of its business. The interest of its
stakeholder provides the equitable career opportunities and employment. The corporate social
responsibility tends to satisfy the interest with the help of programs and policies through
internal leadership policy, health benefits, as well as life insurance, disability insurance.
Costco has provided the avenue to its employees for volunteering in the community and
bringing bright future for them.
2. Customers: customers come at the second priority of stakeholder. Customers are most
significant because it affect the revenue of Costco directly. In order to address the interest of
customers, Costco tends to maintain the agreement with supplier by offering it at the lower
price policy (Martínez, Galván & Alam, 2017).
3. Investors: Costco is required to satisfy the investor interest as the significant
stakeholder group. The interest of the stakeholder group is the business growth and
profitability. The corporate social responsibilities of Costco address the concern of investors.
4. Communities: Communities are said to be the least priority in the Costco stakeholders
group. These stakeholders are also significant for Costco as it directly affect the employee
and consumer perception regarding Costco. They also influence the supply chain of firms.
These stakeholders mainly interested in the community and household development as well
as in environmental protection. For example: Costco gives grants to regional and local
organisation for supporting education, children, human and health services. Around fourteen
hospitals in Canada is helping each year financial. For community uplifment, Costco has also
donated around $64 million in Canada. In this way, corporate social responsibility of Costco
proves to be effective in addressing the stakeholder interest. Costco also satisfy the investors
and customers interest as the most significant stakeholder group.

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Keep satisfied
Local government
(It is because they are responsible
for bringing the positive result for
the organisation)
Manage closely
(Investors and employees)
Monitor
(Media and suppliers)
Keep informed
(Customers, and employees)

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Issues faced by Costco Canada
The first issue seen in the Costco is the technical error in the computers of its store. It
has been found that Costco faced the computer glitch that forced it to close the stores in
Canada. These kinds of error affect the working of the organisation and might affect the
customers who present there during such issue occurred. Another issue seen in the Costco is
the E-commerce sales that negatively impacted due to Black Friday and thanksgiving day. As
per the report, it is seen that Costco has lost around $11 million due to technical issue of its
website. Due to the slow response time or outage, Costco posted the website banner which
states that it is increasing its thanksgiving sales into Friday. It has been seen that its online
sale has been impacted due to the timing of black Friday, thanksgiving and Cyber Monday.
Performance issues on the Canadian and U.S websites on the black Friday and thanksgiving
also impacted its sales negatively (Zeng & Honig, 2017).
The business model of Costco directly depends on the memberships. This strategy
only works when its members regularly purchase the items in larger quantity. It is found that
its customer might move to other competitor such as Walmart. It is found that Costco follows
the warehouse approach. Under this approach, it buys products in larger quantities and sells
them as fast as possible. In case Of customer preference changes, it could leave with several
perishable goods. Due to the bulk item delivery, it is seen that Costco mainly faces problem
in delivering every item. In Canada, the presence of several strong competitors brings issues
in its sales. It is because if other competitor starts any attractive scheme, customer shifts to
that brand as they are getting benefits.
Recommendations to overcome above issues
It is seen that Costco faces high competition from several strong retailers such as
Amazon. In order to avoid the membership of its customers to move for another competitor,
it can start offering discounts on their members. After a certain shopping from the
membership card, it can start providing the attracting gift items to the customers. This will
lead the customers to make more purchase from its stores (Saxena, Chaturvedi & Rakesh,
2018).
It can also offer several discount schemes to its customers so that they can stick with
their supermarket for long time. It can increase its customers on membership card. By taking

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the reviews from customers regarding membership card benefits, it can share the stories on
Instagram and its own website (Saxena, Chaturvedi & Rakesh, 2018). This will help the
customers in knowing benefits of its membership card. In order to stop the customers for
moving to other brand, t can start selling items in small quantities that will attract the
customers to make purchase as per their suitability. It is because some customers prefer
shopping in small quantities as per number of their family member (Kent, Rudnicki & Usher,
2017).
Conclusion
In the limelight of above discussion, it can be concluded that Costco is working
effectively in Canada by working on the corporate social responsibility. Costco has also
invested huge amount for bringing development in the community. However, Costco is
facing several issues in the Canadian market due to its business model and warehouse
approach.

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References
Kent, M. P., Rudnicki, E., & Usher, C. (2017). Less healthy breakfast cereals are promoted
more frequently in large supermarket chains in Canada. BMC public health, 17(1),
877.
Martínez, A. B., Galván, R. S., & Alam, S. (2017). Financial Analysis of Retail Business
Organization: A Case of Wal-Mart Stores, Inc. Nile Journal of Business and
Economics, 3(5), 67-89.
Saxena, A., Chaturvedi, K. R., & Rakesh, S. (2018). Analysing Customers Reactions on
Social Media Promotional Campaigns: A Text-mining Approach. Paradigm, 22(1),
80-99.
Saxena, A., Chaturvedi, K. R., & Rakesh, S. (2018). Analysing Customers Reactions on
Social Media Promotional Campaigns: A Text-mining Approach. Paradigm, 22(1),
80-99.
Weinstein, A. (2018). Superior Customer Value: Finding and Keeping Customers in the Now
Economy. United Kingdom: Routledge.
Zeng, Z., & Honig, B. (2017). A study of living wage effects on employees' performance‐
related attitudes and behaviour. Canadian Journal of Administrative Sciences/Revue
Canadienne des Sciences de l'Administration, 34(1), 19-32.