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Costco and Amazon Companies: Management Strategies Research Paper

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Updated: Jul 22nd, 2021

Costco

Costco is a wholesale corporation with headquarters in Washington. It was founded by Brotman and Sinegal in 1983 under the name Price Club. It is the second largest retail store in the world after the Wal-Mart stores. Before becoming an independent company, it had partnerships with two different corporations namely Wal-Mart and the Club Price.

In 1997, the founders saw the need of working alone so as to get an opportunity to think strategically on how best to expand their business. This followed the confusion which had characterized its mergers with other partners (Costco Wholesale Corporation, 2013).

One of its unique features is that it is one of the few companies which have experienced an uninterpreted growth since their formation. For a period of six years, the company saw its assets grow to hit the $ 3 billion mark in 2003. In the last financial year, the company’s total sales were valued at $97 billion.

Its main competitors in the warehouse business are the BJs and the Sam’s clubs. It currently employs over 170, 000 employees both in part time and full time basis. Its key business development strategy is selling large volumes of goods in low prices. It usually targets large businesses and families due to their ability to purchase goods and services in bulk (Annual reports, 2013).

Even though the company initially specialized on products which were boxed, it diversified and started selling other products such as clothes, food stuffs, computer software, books, flowers, tires, electronic goods, drinks and furnitures among others. It also offers services such as photograph processing, medical services and gas filling services.

Amazon.com

Amazon is a multinational electronic commerce company based in the United States with headquarters in Seattle. It is the largest online retailer in the world with its total assets valued at $ 32 billion. It was founded by Jeff Bezos in 1994 under the name Cadabra. When founding the company, Bezos was trying to minimize his regrets for not expanding soon to take advantage of the internet business boom of the mid 1990s.

His main aim therefore was to market products online by taking advantage of the advancement in information and communication technology at that time. Apart from online services, the company also sells DVDs, videos, software, furniture, jewelery and consumer electronics (Crunchbase, 2013).

In late 1990s, the world witnessed what was described as the dot-com-bubble, which crippled many e-companies. However, Amazon survived the effects of the dot-com-bubble and grew to become a key player in the online sales and services industry. In fact, the company had not made remarkable profits for four consecutive years since its formation.

It was after the survival of the dot-com- bubble burst in 2001 that it made remarkable revenues of $5million. This restored investors’ confidence which had dwindled following the slow pace of growth.

The picking up of the business made many skeptics and critics of Bezos’ business model stop their criticism. His business model gained popularity and made Bezos to be named as the person of the year by the time magazine in 1999 (Amazon, 2013).

Currently, the company has made several mergers and acquisitions. It has also managed to establish businesses in various continents such as Europe, North America, Asia and Africa. To increase access to its services, it has established websites for all the countries where it has operations.

Topic selected for research

The topic of research for this term project is application of mass customization techniques in either manufacturing or services businesses. The purpose of the research is to explore the design, operations and improvement activities which companies are applying in their development and expansion strategies (Dummies, 2013).

The research aims to achieve its objectives by analyzing the two companies discussed above. The reason why the two were selected is because they are among the leading companies in the world in terms of total assets. They are also among the few companies in the world which have experienced a steady growth since their inception.

References

Amazon. (2013). . Web.

Annual reports. (2013). . Web.

Costco Wholesale Corporation. (2013). . Web.

. (2013). Amazon. Web.

Dummies. (2013). . Web.

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"Costco and Amazon Companies: Management Strategies." IvyPanda, 22 July 2021, ivypanda.com/essays/costco-and-amazon-companies-management-strategies/.

1. IvyPanda. "Costco and Amazon Companies: Management Strategies." July 22, 2021. https://ivypanda.com/essays/costco-and-amazon-companies-management-strategies/.


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IvyPanda. 2021. "Costco and Amazon Companies: Management Strategies." July 22, 2021. https://ivypanda.com/essays/costco-and-amazon-companies-management-strategies/.

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IvyPanda. (2021) 'Costco and Amazon Companies: Management Strategies'. 22 July.

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