In this article, Neal Gabler illustrated how Costco Wholesale became the world’s third-largest retailer with $116 billion in sales in fiscal 2016. Costco Wholesale Company has a unique culture engrained into its working environment that helps sustain the headwinds it has faced over the year. The emphasis on the importance of its identity separates Costco from Wal-Mart, Sam’s Club and other large retail stores. The culture of friendly people and emphasizing on lean product selection along with quality service and merchandise help retain a loyal customer base. This model also enriched Costco annual registered membership to 81 million subscribers. Amazingly, within Costco Wholesale Company ninety-eight percent of the company store managers
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However, a stout competitor is emerging from the Seattle suburb of Issaquah. The market has gone from monopoly to duopoly. Fortunately, Costco Wholesale Company did not engage in price fixing with Sam’s Club where two duopolists try to act as one to monopolize the market to prevent another company from penetrating the market. Vice versa, Costco stays with its company philosophy of being fair to its customers using its model of capping at a fifteen percent markup of its items as compared to twenty-four percent at Wal-Mart and thirty percent at other supermarkets.
Furthermore, Costco Wholesale Company focuses on the learning effect. All employees started in Costco from the bottom, pushing carts and stocking inventories. They are given greater responsibilities and allow the freedom to constantly innovate and improve. These invaluable experiences help them cope with reality and give them the understanding of how things are done on the floor. So when there is a discussion, there is a mutual understanding of how the job is done.
Conclusion
In this Article, Neal Gabler reference of “The Magic” in the warehouse is actually the culture that the company preaches to their employees. The invaluable experiences of the company culture raise the employee’s values which in turn make them exceptional. It also makes it tough for someone outside of the company to come in and take over the tasks with no additional training. Additionally, the culture provides the employee the comfortable atmosphere and the security that other company cannot
However, a stout competitor is emerging from the Seattle suburb of Issaquah. The market has gone from monopoly to duopoly. Fortunately, Costco Wholesale Company did not engage in price fixing with Sam’s Club where two duopolists try to act as one to monopolize the market to prevent another company from penetrating the market. Vice versa, Costco stays with its company philosophy of being fair to its customers using its model of capping at a fifteen percent markup of its items as compared to twenty-four percent at Wal-Mart and thirty percent at other supermarkets.
Furthermore, Costco Wholesale Company focuses on the learning effect. All employees started in Costco from the bottom, pushing carts and stocking inventories. They are given greater responsibilities and allow the freedom to constantly innovate and improve. These invaluable experiences help them cope with reality and give them the understanding of how things are done on the floor. So when there is a discussion, there is a mutual understanding of how the job is done.
Conclusion
In this Article, Neal Gabler reference of “The Magic” in the warehouse is actually the culture that the company preaches to their employees. The invaluable experiences of the company culture raise the employee’s values which in turn make them exceptional. It also makes it tough for someone outside of the company to come in and take over the tasks with no additional training. Additionally, the culture provides the employee the comfortable atmosphere and the security that other company cannot