Costco Case

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Costco Group Case Study

1. What is Costco's USP (Unique selling proposition)

Costco’s USP is a simply based approach: to do what is best for the customer as well as the employees. According to the article, “the emphasis is on moral leadership…business decisions are made on the broader criteria of whether they are creating a better value for the customer and whether they are doing the right thing for their employees and stakeholders.” Simply stated, happy employees that are treated with compensation and respect in turn make for a happy business environment that in turn makes for happier customers and increased revenues. All of this must be obtained through their five- point code of ethics (decisions must be lawful, serve the best interests of the customers and employees, respect suppliers, and reward shareholders.)

2. How are they different from their main competition - Sam's club

There are many ways that Costco is different from its competitor of Sam’s Club: Rock bottom pricing, razor thin profit margins, focus on value but also a unique corporate culture that gives not only lip-service to the value of employees but also maintains a reputation of honoring that value; Ownership believes that success lies in the way the company ventures from the norm by overturning conventional wisdoms; They consider their people their competitive edge; Labor and benefits make up 70% of their operation costs, meaning that it is more important to them to be loyal and gracious to their employees rather than profits; Focus on employee satisfaction rather than turnover; Maintaining pricing authority by providing the most competitive value; CEO earns a fraction of what most execs in that position earn and most managers were once cashiers; they allow their local management the authority to make decisions to fit local needs as long as it fits their five point code of ethics…...

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