Costco warehouse corp in 2012 Case Study Example | Topics and Well Written Essays - 1500 words

Costco warehouse corp in 2012 - Case Study Example This paper is going to analyze the success story behind this company and how it has managed to be very successful in 2012. 1. One of the strategy that this company has been able to utilize in order to attain success is to establishment of good employee relations. As a CEO Jim Sinegal managed to visit most of their stores. In a day he would visit 8-10 stores daily. As a CEO he was in charge to be a producer, director, and knowledgeable critic. The second strategy that this company has managed to use is the pricing. Following their mission, their pricing was aimed at encouraging customers to come to their shops. This means that their prices are always low. It is argued that the strong business relationship that Sinegal has with Wal-Marts CEO is a contributing factor to using this strategy. This is because Wal-Mart the largest merchandise producer in the US also utilizes similar pricing strategy. For quite a long time the pricing strategy for this company is to cap its markup brand name merchandise at 14% compared to other supermarkets which markup their merchandises at 20-50%. The company managed to desig n most of the basic products especially food to be equal or better quality than national brands. This was aimed at ensuring that the company provided quality goods at the least prices (Barrera). This strategy has been criticized by Wall Street Journalists as lowering the shareholders profits. However, the CEO of the company argues that their strategy caters for both the shareholders and stakeholders by providing them with quality products at the least costs while the company still makes higher profits. The other strategy that this company uses is the price selection. Most of the supermarkets like Wal-Mart would stock 40,000 or even 150,000. However, Costco’s strategy was to deploy only 3,600 active items in their shelves.