COSTCO

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Costco success history Introduction to Business. Dr. Abdus Aattar Abbasi. Zain-Ul-Abideen. SP11-BBA-085.

COSTCO
What is Costco?
Costco operates a chain of cash & carry membership warehouses that sell high-quality, nationally branded and selected private-label merchandise at low prices to businesses purchasing for commercial use or resale, and also to individuals who are members of selected employment groups. The Company's business is based upon achieving high sales volumes and rapid inventory turnover by offering a limited assortment of merchandise in a wide variety of product categories at low prices. As of the 8th April 2009, the Company operated a chain of 555 warehouses in 40 states of the USA & Puerto Rico (408 locations), nine Canadian provinces (76 locations), the United Kingdom (21 locations), Korea (6 locations), Taiwan (5 locations through 55%-owned subsidiary) and Japan (8 locations), as well as 31 warehouses in Mexico through a 50%-owned joint venture.

History:The companys first location, opened in 1976 under the Price Club name, was in a converted airplane hangar on Morena Boulevard in San Diego, CA, U.S.A. Originally serving only small businesses, the company found it could achieve far greater buying clout by also serving a selected audience of non-business members. 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, WA, U.S.A. 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. Their operating philosophy is simple. Keep costs down and pass the savings on to theirmembers. Their large membership base and tremendous buying power, combined with their never-ending quest for efficiency, result in the best possible prices for their members. Since resuming the Costco in 1997, the company has grown to more than 570 locations worldwide. Costco Japans first location opened in 1999 in Hisayama. They are now operating nine warehouses in Japan: one in Fukuoka (Hisayama), one in Chiba (Makuhari), one in Machida

City (Tamasakai), one in Hyogo (Amagasaki), one in Yokohama (Kanazawa Seaside), one in Kawasaki (Kawasaki), one in Sapporo (Sapporo) and two in Saitama (Iruma and Shinmisato). Founded by James (Jim) Sinegal and Jeffrey Brotman, Costco opened its first warehouse in Seattle, Washington, on September 15, 1983.Sinegal had started in wholesale distribution by working for Sol Price at both FedMart and Price Club. Brotman, an attorney from an old Seattle retailing family, had also been involved in retail distribution from an early age. Sol Price died on December 14, 2009 at 93

In 1993, Costco merged with Price Club (called Club Price in the Canadian province of Quebec). Costco's business model and size were similar to those of Price Club, which was founded by Sol and Robert Price in 1976 in San Diego, California. Thus, the combined company, PriceCostco, was effectively double the size of each of its parents. Just after the merger, PriceCostco had 206 locations generating $16 billion in annual sales. PriceCostco was initially led by executives from both companies, but then Sol and his son Robert Price founded Price Enterprises and left in December 1994.Prior to the 1993 Price merger, WalMart founder Sam Walton wanted to merge Sam's Club with Price Club, The first Price Club location was opened in 1976 in an old airplane hangar,[5][10] previously owned by Howard Hughes, and is still in operation today (Warehouse #401 located in San Diego). In 1997, the company changed its name to Costco Wholesale and all Price Club locations were rebranded Costco.

Costco today:-

In the United States, the main competitors operating membership warehouses are Sam's Club and BJ's Wholesale Club.Although Sam's Club has more warehousesthan Costco, Costco has

higher total sales volume. Costco employs about 142,000 full and part-time employees, including seasonal workers. As of September 2009 Costco had 55 million members. Costco was the first company to grow from zero to $3 billion in sales in less than six years. For the fiscal year ending on August 31, 2009, the company's sales totaled $71.42 billion, with $1.09 billion net profit. Costco is 25th on the 2010 Fortune 500. The ACSI (The American Customer Satisfaction Index) named Costco number one in the specialty retail store industry with a score of 83 in Q4 2008.

As of September 2010, Costco's board of directors is chaired by co-founder Jeffrey H. Brotman and includes three officers of the company: CEO/co-founder James D. Sinegal, President/COO W. Craig Jelinek, and CFO Richard A. Galanti. There are also eleven independent directors: Hamilton E. James (the "Lead Independent Director"), Benjamin S. Carson, Sr., Susan Decker, Richard D. DiCerchio, Daniel J. Evans, William H. Gates, Sr., Richard M. Libenson, John W. Meisenbach, Charles T. Munger, Jeff Raikes, and Jill Ruckelshaus. In the United States, Costco is closed on seven holidays: New Year's Day, Easter, Memorial Day, Independence Day, Labor Day, Thanksgiving, and Christmas.

Sources:
http://en.wikipedia.org/wiki/File:Costco_Melbourne.jpg

http://wiki.answers.com/Q/What_is_costco

http://www.costco.com/

http://en.wikipedia.org/wiki/Costco

http://www.costco.co.jp/eng/costco.htm

http://www.theage.com.au/national/factbox-what-is-costco-and-how-does-it-work-20090817en0z.html