Assignment 1: A Case Study Of Costco's Tragedy

Costco Case Study Costco open their first location in 1976 under the name Price Club, it was later turned into an airplane hangar. Costco originally planned to sell to small business but quickly found it could achieve much higher goals by selling to individuals who were not business owners. “With that change, the growth of the warehouse club industry was off and running. In 1983, the first Costco warehouse location was opened in Seattle. Costco became the first company ever to grow from zero to $3 billion in sales in less than six years. When Costco and Price Club merged in 1993, the combined company, operating under the name PriceCostco, had 206 locations generating $16 billion in annual sales.” (Costco.com) According to Wikipedia, “as of 2011 there are 474 warehouse locations in the United States” (Wikipedia – Costco) Difficult to find out how many locations exist at the end of 2016. Does the company’s strategy reflect the company’s mission? Costco’s tragedy follows in-line to their mission rather well; their mission is this: “The company will continue to pursue its mission of brining the highest quality goods and services to market at the lowest possible prices while providing excellent customer service and adhering to a strict code of …show more content…
Costco Wholesale’s markup is %15 compared to industry at %20 percent; perfect example from Thompson and company, “Some years ago, we were selling a hot brand of jeans for $29.99. They were $50 in a department store. We got a great deal on them and could have sold them for a higher price but we went down to $29.99. Why? We knew it would create a riot.” (2013, p. C-10) Their plan works very well, and obviously has grown their market significantly. Every time I enter a Costco I feel like I am breathing quality, but I cannot say the same for Sam’s Club (even though I worked there for seven