COSTCO

-FUNCTIONAL STRUCTURE WITH GEOGRAPHIC DIVISIONS

-CENTRALIZED

-STANDARDIZED

-MECHANISTIC

Presented By:

Daniel Bach, Anna Rehnstrom, Brayden Haines

Stock Ticker: COST (NASDAQ)

PRESENTATION AGENDA & OBJECTIVES:

-WHO IS COSTCO?

-WHAT DOES COSTCO DO?

-HOW THEY DO IT?

-WHY THEY DO IT.

-COSTCO'S FUTURE.

HOW COSTCO CREATES VALUE

HISTORY AND BACKGROUND

SUSTAINABILITY AND SOCIAL RESPONSIBILITY

-1st Price Club opened in 1976

-1st Costco opened in Seattle, WA in 1983

-Costco and Price Club merged in 1993

-Costco Wholesale now the 7th largest retailer in the world

-Recycling

-Energy Efficiency

-Sustainable Seafood

By: Anna Rehnstrom

By: Brayden Haines

By: Daniel Bach

COSTCO'S CORE COMPETENCY

MISSION STATEMENT

PRODUCTS AND SERVICES

-THEIR ENTIRE LOW COST MODEL...

-IT'S IN EVERYTHING THEY DO...

-ELIMINATE ALL COSTS ASSOCIATED WITH CONVENTIONAL RETAILERS...

-PASS THE SAVINGS ON...

"Costco's Mission is to continually provide our members with quality good and services at the lowest posible prices."

• WHOLESALE

• MEMBERSHIP

"Costco is able to offer lower prices and better values by eliminating viturally all the frills and costs historically associated with conventional wholesalers and retailers." - Jim Sinegal, CEO, Costco

Target Market : 40 - 60yrs. with income of $75,000+

--Small Business, Individual, Family--

By: Brayden Haines

Grocery, Bakery, Electronics, Apparel, Sporting Goods and More!

By: Daniel Bach

By: Anna Rehnstrom

CULTURE & CODE OF ETHICS

PRODUCTS AND SERVICES

COMPETITIVE ADVANTAGE

FIVE GUIDING PRINCIPLES:

1. Take Care Of Members

2. Take Care Of Employees

Wine--Spring Water--Bed Linen--Jeans--Cookware Sets

3. Respect Suppliers

4. Reward Shareholders

Customer service is top notch and we stand behind all of our products and services.

-Started in 1995, named after the city of Kirkland, Washington, where the Home Office was located

-$4 billion brand

-High standards of quality, value and price

By: Daniel Bach

By: Brayden Haines

By: Anna Rehnstrom

MEMBERSHIP OPTIONS

OPERATIONS, EMPLOYEES, MEMBERS

STRUCTURE AND HIERARCHY

Employees: 184,000

TOTAL

*Full-time: 103,000

*Part-time: 81,000

• Gold Star Membership
• Business Membership
• Executive Membership
• TrueEarnings Card

Members: 35.5 Million

TOTAL

-Gold Star: 28.9 Million

-Business: 6.6 Million

Warehouses: 648 TOTAL

-U.S. & Puerto Rico: 461

-Canada: 87

-United Kingdom: 25

-Taiwan: 10

-Korea: 9

-Japan: 18

-Mexico: 33

-Austrailia: 5

GOLD

EXECUTIVE

TrueEarnings

CARD

BUSINESS

• $110 annual fee
• Available for individual/household or business use
• Members receive 2% back on all purchases (up to $750)

• $55 annual fee
• For individuals and households
• Mostly for personal use
• Available for purchase by Costco members to give as gifts

• $55 annual fee
• Up to six cardholders, each for $55 fee
• Designed for business managers and owners

• Partnership between AMEX and Costco
• 3% cash back at gas stations
• 2% cash back at restaurants
• 1% cash back on all other purchases
• No annual fee with Costco Membership

By: Daniel Bach

By: Brayden Haines

By: Anna Rehnstrom

STRUCTURE AND HIERARCHY

FUN FACTS

-CEO

-COO's

-Division Managers

-Regional Managers

-Warehouse Managers

-Wages are much higher than competitors

-Costco sells more than 70,000 rotisserie chickens a day

-Warehouse in Lancaster, PA has designated parking for local Amish population

-Pizza is AMAZING!

By: Brayden Haines

By: Anna Rehnstrom

QUESTIONS?