Scribd
Upload
105 views4 pages

Home Assignment Instead of Final Project Presentation

Here are some of the key benefits Costco receives from treating its employees well beyond lower turnover: - Employees are more loyal, committed, and productive which contributes to Costco's success and profits. - The company benefits from low recruitment and training costs since it promotes from within and retains experienced staff. - Happy, healthy employees provide better customer service which enhances Costco's reputation and customer loyalty. - Competitive wages and benefits help Costco attract high-quality employees. This supports the company's strategy of offering customers low prices through efficient operations. - Perks like health insurance, retirement plans, and stock options motivate employees and reduce costs associated with things like sick leave and employee turnover. So

Uploaded by

ashraful islam shawon
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
105 views4 pages

Home Assignment Instead of Final Project Presentation

Here are some of the key benefits Costco receives from treating its employees well beyond lower turnover: - Employees are more loyal, committed, and productive which contributes to Costco's success and profits. - The company benefits from low recruitment and training costs since it promotes from within and retains experienced staff. - Happy, healthy employees provide better customer service which enhances Costco's reputation and customer loyalty. - Competitive wages and benefits help Costco attract high-quality employees. This supports the company's strategy of offering customers low prices through efficient operations. - Perks like health insurance, retirement plans, and stock options motivate employees and reduce costs associated with things like sick leave and employee turnover. So

Uploaded by

ashraful islam shawon
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 4

Home assignment instead of final project presentation

course: MGT 212

sec: 05

Name: Ashraful islam shawon

ID: 1813325630

Date: 12/04/2020

Submitted to: Rumana Huq Luva (RHL)


Question 01

How is Costco’s business model different from other retailers such as Walmart and Sam’s club?
Why do you think Costco’s strategy works?

Ans: Costco follows a simple strategy of selling focused variety of products. Unlike Walmart
that sells all different kinds of products. Costco has a very customer focused strategy. They only
sell
a limited number of brands and, as a result, they are able to increase sales volume that
leads to purchasing discounts. For example, Costco only carries four brands of tooth paste,
compared to about 60 brands you’d find on the shelf at Walmart. Thus, the company is able to
purchase those four brands in significant volumes, which allows them to
negotiate with the product manufacturers for discounts. The company then passes along
those savings to their customers through lower prices. Costco prices items at no more than
15 percent above their purchasing price. This markup strategy assures they are offering
the lowest price possible, which is what draws customers and creates a loyal customer base. The
company’s strategies that differentiate it from its competitors are to treat employees well, limit
the
number of items it sells, and keep markups low. Costco clearly values its employees. The
company pays its employees on average 40 percent higher than competitors and offers health
care insurance to all employee who work more than 20 hours per week. The company is also
known for promoting from within, with 98 percent of their store managers and many of their
company executives having started out as stock clerks or cashiers. These efforts have helped
build a loyal and hard-working employee base that actively contributes to building a profitable
bot tom line. The strategy works because they are very much focused to their customers. They
sell their product at lower price than other company like Walmart and Sam’s. They work on
customer demand so they only sell some specific brand. They treat their employees very well.
Sticking with these simple strategies has helped Costco build their retail empire.

Question 02
Beyond lower turnover, how else does Costco benefit from treating its employees well?

Ans: Costco is on the cutting edge of the future of retail. Customers love the low prices, sure.
But Costco also understands the importance of low retail employee turnover, and they know how
to create a work environment that celebrates the workers. The average hourly salary at Costco
hovers around $20, though that figure is a bit misleading. While supervisors or specialists may
make more than that, the wages are closer to $12 or $13 per hour for cashier's assistants and $15
per hour for cashiers. Still, that's substantially more than a cashier makes at other major retail
chains. The key to financial security is a strong investment portfolio. Costco not only offers
company stock as a benefit, but they also pay the commissions and fees for employee
investments. Costco offers discounts to health clubs as part of their personal health and wellness
benefits program. Their health insurance program also covers routine screenings, checkups,
prenatal care, and contraceptives with no copay for employees. According to employee reviews
on job search sites, Costco receives praise for making sure employees get generous shift breaks.
They offer vacation, and there is ample opportunity to grow. In fact, Costco is well-known for
promoting from within, which is an obvious incentive for employees to remain committed to the
company. Not every company is in the position to offer discounted health club memberships or
company stock. Very small businesses may not be able to offer a lot regarding growth. However,
every business can learn a few things from Costco's low retail employee turnover rates. The
simple key to retaining employees is to understand how important they are to your business. Just
because you can hire a cashier off the street for minimum wage doesn't mean you should. Yes,
Costco pays a living wage, for the most part. And yes, that may initially seem to be an extra
expense, but with $2.4 billion in profits in 2015, it seems clear that treating employees well isn't
hurting Costco.

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy