Case Study: Costco in 2020
Jim Sinegal Costco’s co-founder and chief executive officer (CEO) had been the driving force behind Costco’s 37-year evolution from a startup entrepreneurial venture into the third largest retailer in the United States and the world (behind Wal-Mart and Amazon.com). Costco is the undisputed leader of the discount warehouse and wholesale club segment of the North American retailing industry. Craig Jelinek took the reins in 2012 as Costco Wholesale’s president and CEO. Under his guidance the company has prospered, growing from annual revenues of $89 billion and 598 membership warehouses at year-end fiscal 2011 to annual revenues of $152.7 billion and 787 membership warehouses at year-end fiscal 2020.
In 2021, Costco continued to maintain its rank as the third largest retailer in both the United States and the world. The cornerstones of Costco’s strategy are low prices, special selections of popular foods and merchandise, wines, select new items, limited selections, and a lifetime warranty on most items.
Using Costco’s August 29, 2021 Form 10K, prepare an analysis of the company’s performance in years 2019, 2020 and 2021 to include discussion of the following points:
The CEO as chief strategist and organization leader;
Costco’s mission, business model, and business strategy;
Costco’s warehouse operations, compensation practices, business philosophy, core values, and ethical standards;
The company’s financial performance using two key profitability financial ratios; and
Provide a summary of the key points.
