Retail loss prevention is a set of practices employed to preserve profits by reducing preventable losses. This involves keeping an eye out and reporting any suspicious activity to the managers, paying more attention to item-by-item merchandise process, also preventing internal/external theft and paperwork
Alternative 3 (Amazon servers) Costco needs to have their information kept safe and secure. Arranging a partnership, with a third-party take care of their data will reduce the cost of employees, maintenance, warehouses, data corruption, and liability. Using a company server will allow Costco management to focus on other departments and areas that are a focus on achieving their mission statement and goals. Pros
2.CVS Inventory Loss reserves: 189 Million 2015 2014 2013 2012 2011 Cost of Goods Sold 126,762.00 114,000.00 102,978.00 100,627.00 86,539.00 Inventories 14,001.00 11,930.00 11,045.00 10,759.00 10,046.00 Inventory Turnover(Days): 9 9.5 9.3 9.3 8.6 Walgreen: 9 7.5 7.2 6.4 6.5 Industry: 9.52 9.55 9.62 8.9 Day in Inventory: 40 37.9 39.24 39.24 42
Costco Wholesale Corporation strives to grow and expand through their competitive retail and pricing strategies in their market. As a retail firm, Costco depends on cusumer purchasing capacities (Gregory 2015). Costco offers a limited number of items that are afforadable quality services and goods to their consumers and believes it aids to their continued growing and expanding success. Costco is driven by cost leadership for their retailer store because they would rather maintain the lowest prices possible which enable customers to return. Costco largely relies on their pricing and retail strategy to continue sales and organization success.
Costco is a warehouse club membership, who strives to provide their members the best quality in goods and services at the lowest possible prices. Costco also strives to provide liquidity and solvency to its firm to cover expenses such as employees pay and bills. I think Costco increases its cash flow by using several sources such as internal operations and by issuing stocks. A membership fee is one of the greatest sources that Costco has to enhance cash flow because this membership allows their members have a very low cost of goods.
The activity ratio or better known as the inventory turnover ratio due to its ability to determine on average how long inventory sits can be used as one of the best indicators showing how efficiently a company is turning its inventory into sales. By figuring out average inventory (last year plus current year divided by two) and dividing it by Cost of Goods Sold (includes labor costs as well as cost of materials) you will be able to find your activity ratio. Blizzards inventory consists of roughly 125,500 units a year costing roughly $1.6 million (12.63 AR) to produce, while close competitors like Sony, an entertainment company who manufactures technology as well as, produces roughly 624,289 units at about $5.2 million (7.66 AR) to produce annually,
The balance sheet provides financial data at a specific date regarding a company’s assets, liabilities, and stockholder’s equity which is used to help predict future cash flows and assess a company’s flexibility. (Kieso et al., 2022) Costco’s consolidated balance sheet reported total assets of $64,166(million) for FYE 2022 which are categorized as current assets and other assets. Costco’s short-term investments are debt security notes. Receivables consist of vendors discounts and rebates which are settled against any payable due the vendor, credit card incentives, reinsurance, third-party pharmacy due from members, and other governmental tax-related entities. Merchandise consists of inventory from United States, Canada, and internationally.
Costco excels by having fewer choices to choose from and focusing on volume translating into lower prices for customers. Costco supply chain efficiency is industry leading. An integral component of Costco’s supply chain efficiency is the cross-dock distribution (depot) facility.
Another strategy Costco focused on is Product Selection. When re stocking their shelves Costco has a strategy that is explain as a “intelligent loss of sales". Unlike many other retail stores or whole sales they stock up on brands from 40,000 to 150,000 items from shoppers to choose from, but Costco only has a selection of 4,000. Costco strategy is to limit its selection in each product to fast selling models, sizes and colors. The Advil example proved that if they had many size it would be harder to manage.
3.0 Concepts 3.1 Resources and Capabilities In order to achieve and sustain competitive advantage, a business needs both resources and capabilities. Resources are assets that are owned or employed by an organization. The organization utilizes and uses these assets to carry out their business operations. Resources can be grouped either tangible assets or intangible assets.
I would recommend below changes in the CompuCo global product development strategy. Culture: As studied in our Bull HN case (Week 4), French is slower and thoroughly studies the process. CompuCo US has to understand the global culture and communicate global offices with patience.
Few of the ways Costco displays the value of putting employees first is by compensating them above the national average pay grade, investing back in the community and being environmentally sensitive. In 2015 they contributed over $31 million to various organizations. Some other areas are as follows: Employee first: Costco has displayed these value in several ways and they believe in following through on their commitment to the community. They believe in hiring locally to give back to the community.
Key Trends – Globalisation One of the main opportunities Costco has is more global expansion to specific targeted countries. Although operating in many countries, Costco is heavily dependent on the U.S. and Canadian markets. It still has the opportunity to expand into the Asian and Australian markets where it has a limited presence. Costco has the capability to operate about 100 stores in Taiwan, Korea and Japan combined and about 20 stores in Australia. It currently has 41 stores in Taiwan, Korea and Japan combined and 6 stores in Australia.
I do think that the inventory at my Walmart is not working as efficiently as it could be because of some of the decisions management makes. Right now we are working with very small storage conditions
What are the two types of core competencies that drive a firm’s competitive advantage? Which firms demonstrate a clear competitive advantage because of (a) major value-creating skills/core capabilities and/or (b) superior assets or resources? Which firms have demonstrated sustainable sources of competitive advantage? The two core competencies that drive a firm’s competitive advantage are cost leadership and differentiation.
