BUS499 Business Administration Capstone

Week 3 Assignment 1

Costco is an American Wholesale corporation that runs a warehouse firm for members. Having begun with one warehouse in 1976, the retailer has grown to attract more market globally raising its number of warehouses to 785 as of December 31, 2019. The change in structure has resulted in the company creating universal memberships enabling easy access to products from diverse locations.


Globalization has enabled a company such as Costco to operate beyond regional boundaries and providing a wide variety of products. In this technological era, Costco is striving to provide its members with quality and timely products at their convenience through integration of well-managed technological platforms (Pieterse, 2019). For instance, Costco has developed a commercial website that directly assist customers to view and purchase products online (Divine, 2017). This technology has enabled the company to improve in advertising and marketing giving its competitive advantage over its rivals.


With the emergence of mobile banking and electronic payment methods, Costco has ensured that customers can purchase products and pay online with convenience of their location. This has not only increased their market share but also has improved on security of payment methods (Karle, 2019). Through electronic payment and e-commerce, the industry can account for all activities within its operations.

Industrial Organization Model

Organizational model defines the structure and methods used to meet the customers’ expectations and may vary in different companies.’ Organizational model also includes roles and the company’s norms of interaction and operation. To ensure a wide market reach and good customer relations, Costco should focus on efficient application of organizational model in its operations through integration of the various activities. For instance, the companies should constantly adopt the practice of research to build on the existing knowledge and to find better solution to meet the client’s needs

To achieve its main goal of offering cheap and quality products, Costco should establish different departments that enable specialization to provide optimal performance. This can improve sales and reliability. To reach a wide market share, it is necessary for Costco to have a sales and marketing department that promotes public relations (Jalbert, 2019). The department can be formed by brand ambassadors and marketing strategists to focus on reaching more market by creation of advertisements and promotion offers to loyal customers.

In addition, the organization model should comprise division of roles to both managerial and subordinate staff. The staff working at Costco both have allocated duties that play part in general industry operation and defining set roles enables maximum productivity and good relations among the staff and customers.

Resource-based Model

Resource based model can be categorized as either tangible or intangible and is defined as an industry’s internal resources that influence its production. To enable achievement of a company’s objective, the model is supported by the various organs of production. To achieve above average returns, Costco should determine the potential offered by each resource. Ensuring knowledge of the resources provides insights on its capabilities and offers significant advantage over other rivals.

The cooperation should also emulate and adopt strategies that help it better understand and utilize the resources available. A better understanding ensures use of the resources and provides alternatives in case of failure or poor performance (Jalbert, 2019). Achieving above average returns also requires clear definition strengths and weaknesses of Costco.

In relation to the customers, Costco should understand areas that need improvement and major on its strongholds. The cooperation should focus on the risks that may lead to adverse effects its stock price and market volatility which is as a result of its failure to meet expectations posed by the financial market. To combat this, Costco needs to ensure formulation of policies that regulate the earnings per share and reduce stock repurchase that could suppress their stock prices (Karle, 2019). Tracing earning per share and studying the growth rate can assist in ensuring better policies are set.

To improve its returns to above average, Costco also needs to focus on analyzing the economic factors such as inflation that may affect cost of products in different international regions. Due to changes in environment and even climatic changes, Costco is bound to experience downtrends in sales that may suppress its revenue.


Costco vision states “A place where efficient buying and operating practices give members access to unmatched savings.” is a strategic operational objective. The vision also focuses on customer satisfaction through providing efficient prices of variety goods.


Costco mission states “to continually provide our members with quality goods and services at the lowest possible prices.” The mission is focused at providing a sense of confidence to the customers by ensuring delivery of standard and quality prices. The mission attracts market and this strategy provides a selling point for the market.

In addition, the mission provides Costco a competitive advantage over its rival retailers by reinforcing the view that they offer their commodities at low prices. Affordability of commodities provide customer satisfaction by ensuring buyers purchase at low costs (Divine, 2017). This strategy provided by the mission ensures the company attracts more customers and growing its market share in all its branches.


Stakeholders are an essential part of any business. For instance, shareholders are members of a cooperation who buy shares in legal proceedings that enable a company to finance its operations. Shareholders in Costco are a major support to the operations of the company and impact on its success through pooling of resources. secondly, customers are also an essential part of the stakeholders (Pieterse, 2019). Customers provide more revenue through levied taxes on goods and by subscriptions of membership. With customer membership, Costco can provide insurance policies to customers as a way of raising its revenue.

Additionally, the community is also a stakeholder in Costco cooperation and provides significant influence on the company’s operations. Due to community outreach programs achieved by various warehouses of Costco, the firm ensures the community attains success as well. The suppliers are also major stakeholders in Costco’s firm (Karle, 2019). Due to increasing demand for various products, Costco has different suppliers that supply material and service goods (Costco, 2019). In doing this, Costco increases its performance through access of efficient materials to provide quality products from its suppliers.

In addition, employees are also stakeholders in the company who provide support through providing labor and offering customer services (Jalbert, 2019). Employees provide labor services and earn income from Costco making them major stakeholders in the firm. Interestingly, employees are also the most important part of the company as they are the first customers.

Banks and private investors are also stakeholders in Costco cooperation. Through centralized system of managing revenue and creating financial reports, these stakeholders allow smooth purchase and selling of goods. The banks provide monetary transactions and creates management analysis of financial matters which are crucial for financial reporting of the firm.


Pieterse, J. N. (2019). Globalization and culture: Global mélange. Rowman & Littlefield.

Divine, J. (2017). Pros and Cons of Buying Costco (COST) Stock.

Jalbert, T. (2019). Merger Opportunities Among Club Shopping Stores. Global Journal of Business Pedagogy, 3(1), 54-65.

Costco. 2019. Annual report fiscal year ended September 1, 2019.

Karle, D. (2019, May). Expanding Urban Cultural Production. In ARCC Conference Repository.