Planning and Measuring Performance for Costco Corporation Roger Scmidt MGT/521 February 25, 2012 Roberto Guzman Planning and Measuring Performance for Costco Corporation My week 3 Organizational Plan Assignment was the Costco Wholesale Corporation. I identified its current goals as 1) control costs by reduction of inventory and careful selection of high quality goods and services and careful expansion of its’ domestic market. To elaborate, Costco has been very successful at keeping costs down by minimizing waste and storage expenses with a rapid turnover of its’ inventory. This is at least in part due t0 its’ ability to sell high-demand goods and services for very low prices. Additionally, Costco has a goal of 3) maintaining its employee workforce, as high employee job satisfaction has translated into exceptional customer service and low employee turnover (Costco, 2012).
An automated ordering system will help with this issue, as well. Having qualified people in positions such as the baker, wine steward and butcher, are essential to the core values of Kudler Fine Foods. Having to pay them, does make the payroll higher, but it is a cost, that this business will have to pay. Having these people is one reason customers shop there, for the advice, and interaction these people provide. Qualified in store experts, is something that sets this business apart from other stores.
Eating about two servings of fish per week provides healthy amounts omega-3 fatty acids that can help to lower cardiovascular disease. Although they have such great health benefits to us, we are putting many of the popular fish species we enjoy, such as salmon, tilapia and haddock, at risk for endangerment and environmental malpractice. There are many differences between farm raised and wild caught, but they both can be done in responsible manors that won’t harm the environment in an adverse way. It can be hard at times for suppliers to follow through with proper fishing technics especially when regulation is almost non-existent. Much of the shamming of improper fishing techniques is held against farm raised fish and the conditions in which they are raised.
Grocery stores are in competition with smaller markets like Kudlers and Whole Foods. If the brand name grocery stores like Ralphs and Vons did not offer organic and specialty items, the market structure of Kudler Fine Foods would differ. This market structure positively affected Kudler because there was no barrier to entrance within the quality foods market. What negatively affects the company with this market structure is that they are compared to big companies who are able to supply some of these rare items at a more competitive price. One of the marketing strategies that ensure the company of long-term profitability is the personal relationship built with the customer base.
The strengths of the company are beneficial for sustenance; however, the weaknesses could pose a threat to the company’s long-term viability and its desire to remain a leader in the region. The structure of Kudler is a monopolistic market structure because there are many stores offering similar products, but differentiated. If Kudler Fine Foods implements the recommendations, it can continue the substantial lead it has in the market as well as expand to become a nationally recognized
Short vs. long-term focus In the case of short or long term focus when it comes to employment, it is my opinion that it depends on what you are looking for. However, it is my opinion that for your particular company a long-term focus would be better of for you guys and will help you grow faster and have a solid and consistent mission throughout your regions. I believe that having a long-term focus and investing in developing your talent will result in having great managers that will pass on the culture of the company to their employees; in whichever store they happen to be placed. Since one of the concerns for both Emerson and Wood was the lost of the company core values as a result of expanding, I believe that having a long term approach to employment will assure that those who stay with the company pass on those values to the next generation of
9). The rotation of perishable goods can be improved by conducting a survey and a questionnaire to the customer to indicate the needs of customer. Analyzing a turnover ratio per capital of each product will minimize the perishable rates. If a proper turnover ratio were set for the operation of buying and stocking of a product, KFF can easily expect what to expense and when to allocate the budget cutting the loss of excessive supply of the product. Specialty Shops Because KFF offers sophisticated professions such as butcher, baker, and wind steward, “payroll of these specialty positions is higher than that of the clerks and stock personnel” (KFF strategic plan, p. 9).
Kudler’s has an inventory that consists predominantly of perishable goods that require replacement often. Kudler’s could cut costs and leave items on the shelf a day or two longer, but that would call into question their very reason for existence in being known for fresh foods. Reputation with customers can be lost with one poor decision. One way to counter that is to provide exceptional customer service. Kudler’s means of differentiating itself from the competition is its ability to provide the best products and the best customer service.
However, there is opportunity with the organization to understand customer buying patterns, market needs, promotion effectiveness, and determine customer price limits. Therefore, the recommendations are to truly utilize the concentrate growth strategy by adopting a loyalty program. Consumers are aware that is very costly to shop at WFM. Even though many desire an exclusive organic, whole food diet, it is not affordable in today’s economic times. Focusing on one market or region at a time, WFM should roll out an incentive program for loyal consumers that offer price breaks every time they shop.
Discount rate = 11%. The Net Present Value (NPV) of an investment proposal is equal to the present value of its annual free cash flows less the investment’s initial outlay (Keown, A. J., Martin, J. D., & Petty, J. W. (2014). The rule here is that our company will accept projects with a net present value greater than zero, and decline the ones with a net present value that is less than zero. The greater the net present value, the more appropriate the investment is. Based on that, Corporation B is desirable to Corporation A as it has a greater net present value.