Executive Summary
Costco Warehouse Business will operate in Canada and especially within the Nova Scotia region. The mission of the business will be, “To be the most reliable wholesale business that provides the consumers of Nova Scotia with the most bona fide products at the most affordable local prices.” The business will offer consumer, electronic, technological, and commercial products to the young and middle-aged consumers. With an experienced workforce from its other channels, the company will have a bright future.
Business Description
Business Name
Costco Warehouse Business is the name of the intended business organization. The business derives its name from its mega-company located in the United States (Costco, 2015). The business name, “Costco Warehouse Business”, represents a wholesaling business idea in which several products are available under one premise.
Business Description
The Costco Warehouse Business will deal with a wide selection of merchandise. It will specifically delve into the wholesaling of various consumer and commercial products, home appliances, electronics, industrial products, clothing, and food products.
Form of Business Ownership
The Costco Warehouse Business will be in the form of a corporation. The business will be a corporation, as such ownerships exist where there is a group of shareholders with shared goals and partnership agreements (Kamala & Vipin, 2006). The business will represent the mega international corporation, with its main offices in the US.
Ideal Customer
The ideal customer for this business is any consumer with the right purchasing power for the selected items. The Costco Warehouse Business will rely on customers of all ages and especially those interested in the product range provided in the warehouse.
Our Advantages
The intended business set up will have various competitive advantages against its closest market competitors. The proposed business will have the following competitive advantages based on its intended business location:
- A long-standing positive business reputation
- Financial stability and transformative leadership
- High-level technological know-how and innovation
- A reputable customer service
- A variety of quality business products
- A flexible international business strategy
- Experienced staff members with professional abilities
- International endorsements in various regions
- Commitment to customers and other stakeholders
- A long-standing history of positive business integrity
Ethical Issues
The Costco Warehouse Business will observe several business ethics during its operations. Some of the ethical business values for the company as proposed by Jamali and Mirshak (2007) will include
- Conducting business with maximum integrity
- The business will operate with honesty.
- Trustworthiness will be a pillar of our business.
- Business loyalty will be paramount.
- All consumers will receive just and equal attention.
- All employees and managers will abide by the laws.
- Leaders should demonstrate integrity and respect.
- The involved stakeholders will work with maximum commitment.
Corporate Social Responsibility
The intended Costco Warehouse Business will have the following corporate social responsibilities within its premises.
Environmental Protection will be our core business CSR value
The intended business will be environmentally responsible by ensuring that its practices are meeting the core values and the ethical standards through the following measures. The business will
- Deal with law-abiding suppliers;
- Follow the local environmental regulations;
- Protect the water and land resources;
- Ensure proper maintenance of its disposal systems;
- Support the growth and sustainability of the local habitat;
- The business will set out independent environmental protection policies.
Being socially responsible shall be our core CSR value
The intended business will be socially responsible through various practices from the recruitment of the workers to its assessment of the suppliers and the assurance of quality products (Saeed & Arshad, 2012). This goal will be achieved through
- Unbiased hiring, selection, and retention of the company workers
- A comprehensive assessment of the suppliers for quality assurance
- Consumer protection initiatives shall prevail to protect consumers
- Employee empowerment and fair treatment in the workplace shall be mandatory
- The local communities will be engaged in poverty alleviation programs
- The business will offer disability aid and youth and women empowerment
Global Issues
The growing demand for new investments in consumer products and warehouse goods will make the offered products marketable in Nova Scotia. Through effective strategic business development, the business will use local partnerships to expand.
However, the competition will be inevitable due to the growing foreign and local investments in Nova Scotia (Reza & Catherine, 2015). The intended Costco Warehouse Business may face global challenges from Wal-Mart Supermarkets, Hudson’s Bay Company, and the Loblaw among others.
Costco Warehouse Business
Mission Statement
The intended Costco Warehouse Business will have the following mission statement -To be the most reliable wholesale business that provides the consumers of Nova Scotia with the most bona fide products at the most affordable local prices.
Business Goals
- To expand the warehousing services of the internationally renowned Costco Wholesale Corporation to Nova Scotia
- To bring closer the most valuable industrial and consumer products with high technological opulence to the local Nova Scotia consumers
- To provide our esteemed Nova Scotia consumers with the most valuable products at the most affordable local prices
SWOT Analysis
Strengths
The foremost strength of Costco is its financial stability that will promote its expansion strategy. The second strength of the intended business is its experienced workers who will support a smooth transition into the new business premise. The third strength is the transformative leadership that will foster strategic development in the new premise.
Weaknesses
Sourcing for a variety of products has been a weakness for most Costco business outlets. Consumers have been blaming the management for the lack of proper assessment of the various products available in the market (Foote, 2002). The second weakness according to an assessment of the mega outlets of Costco Wholesale Corporation is that the company lacks an innovative marketing approach to attract the new generation consumers (Foote, 2002).
Opportunities
The core business opportunity for the Costco Warehouse Business is its long-standing reputation in wholesaling and warehousing that will make it likable to the Nova consumers. The second business opportunity for the business is the untapped warehousing and wholesaling chances around Nova Scotia, in which the business expects to attract a pool of young consumers.
Threats
The increasing foreign direct investment in Nova Scotia is an indication of augmenting market competition that will affect the profitability in the case of the wholesale investor’s increase (Reza & Catherine, 2015). Another significant threat to the intended business is the presence of online stores in Canada, which have similar merchandise with equal quality and lower prices as compared to Costco.
Management
Top in the management will be the Chief Executive Officer (CEO), deputized by the Managing Director, who will control the rest of the leaders including the Assistant Managing Director, and the departmental managers and supervisors.
Organization Chart
Corporate Culture
Corporate culture covers the beliefs and certain organizational behaviors that will determine how managers and employees of the intended venture will relate and handle their external business transactions (Becherer & Helms, 2009).
Based on its historical lapses in attracting new and young consumers, the corporate culture of the Costco Warehouse Business will base its foundation on a blend of the professional environment and casual approach to entice young consumers.
The Framework of Costco’s Organisation Culture
Leadership Philosophy
The business will have a charismatic leadership idea based on the 3Ps model. The 3Ps (passion, people, and purpose) model dwells on three important facets of business development and management.
Passion
The passion towards result-oriented outcomes will drive the managers to instill the necessary motivation on employees to work towards achieving the organizational and other business objectives.
People
Business relies on people including consumers, suppliers, and employees. The leadership philosophy that will propel growth and corporate responsibility is focused on the business stakeholders.
Purpose
The leadership philosophy of Costco will focus on achieving the goals and objectives established by the organization. All leaders will be goal-oriented throughout the business operations.
Job Description, Roles and Responsibilities
The Chief Executive Officer (C.E.O)
- Leading the top officials of the company.
- Advising the management board.
- Overseeing the promotion, product design, and service delivery programs.
- Representing the company on major external management issues.
- Enhancing community involvement and public relations.
The Managing Director
- Leading the assistant director and the other managers.
- Implementing company policies.
- Supporting the other managers in decision-making.
- Developing strategic plans for the business.
- Building and motivating an effective management team.
- Representing the board and assuming full accountability whenever necessary.
Departmental Managers
- Implementing the company policies at the departmental levels.
- Making strategic decisions within their departments.
- Managing departmental activities in an effective manner.
- Ensuring maximum cooperation and proper use of company finances.
- Ensuring the smooth running of all departmental activities.
- Directing the supervisors towards achieving corporate objectives.
Company Supervisors
- Provide staff with the needed assistance in complex duties.
- Plan or design work schedules and assign specific responsibilities.
- Monitor the performance of staff and especially the attendants.
- Direct and supervise sales employees on specific activities.
- Keep records of sales, purchases, and requisitions.
- Make appointments with the retailers to make certain promotions.
Job Specifications
- All top officials must have a Masters Degree in the required positions.
- The lowest possible requirement is a Bachelors Degree for the employees.
Training Employees
The company will have on-job training initiatives that will begin from the launching of the company to its continuous development. On-job training will offer professional and skill development.
Compensation
The intended business will have certain pay rates on the salaries and wages
Salaries
Salaries will be the guaranteed monthly compensations for the permanently employed workers of the warehouse. The CEO will get an annual salary of $30K, the Managing Director $18K, while the Supervisors will get $10K based on the company’s remuneration policies.
Wages
Wages will be payments given to the casual laborers who will work for the warehouse. Casual laborers will be earning about $20-65 per day based on the given tasks.
Incentives
- Recognition for employees on performance-based merit.
- Employees’ awards based on their annual performances.
- Rewards for employees based on accomplished targets.
- On-job promotion depending on the employees’ performance.
- Fringe benefits for all employees dedicated to their works.
Managing Operations and Information
Information Technology (IT) Resources
The Costco Warehouse Business will require a set of technological equipment.
The Hardware IT System
The hardware system for the business will involve a set of modern core I series computers for the cashiers, the managers, and the supervisors. The barcode readers and the swipe machines are some of the vital accounting supportive IT machines (Perry, 2002). Other important IT hardware systems are the CCTVs, LED lighting systems, electric cables, and the LED screens to support the CCTVs. These IT items will be paramount in reinforcing the security apparatus of the business (Perry, 2002).
The Software IT System
For the computers to run smoothly coupled with the appropriate functioning of the CCTVs and barcode readers, the company will purchase and incorporate the most effective computer operating systems, system software, and computer apps (Perry, 2002).
Customer Services
For effective service delivery, the Costco Warehouse Business will have a customer care system, which will involve an integrated customer service desk, a 24/7 telephone system, and an online social media platform for handling consumer issues. Customer comments, compliments, and complaints will be addressed using the three customer care platforms.
Cost of Doing Business
Expected Revenue
The annually expected revenue will depend on the number of consumers, purchases, and the prices of the products. The business expects each consumer to spend about $5k per month on shopping. The company expects over 300, 000 consumers per month. When calculated, the expected annual revenue is $1,500,000.
Income Statement and Balance Sheet
Floor Plan
Raw Materials and Supplier
In terms of raw material, the business will need shelves made of metal bars and wooden material and medium-density fibreboard (MDF) boards.
Quality Assurance
The company will be buying goods from trusted suppliers and manufacturers, who have a reputable record of accomplishment in the production of quality goods. All the products purchased will undergo quality assurance assessments through government platforms.
Target Market
The target market is the young and middle-age consumers of Canada, who have been neglected in most Costco warehouses. The business will need these two consumer groups to establish a young consumer profile.
Product Features and Benefits
All products will have varied features and benefits depending on what the producers will have set aside for the products. The products will have specific warehouse promotions if they are packaged and produced in-house.
Product Differentiation
There will be no plans for product differentiation for the company will rely on already produced goods from the available manufacturers and suppliers.
Pricing
The company will use the market-oriented pricing strategy in which the prices will depend on the analyzed market prices and compiled information about the market.
Place (Distribution) Issues
The geographical setting for the Nova Scotia region is favorable for undertaking home deliveries for the esteemed consumers and wholesale buyers.
Advertising
The advertising program of the Costco Company will rely on the new technology in which the digital televisions, social media platforms, websites, and radio and onsite adverts will comprise part of the advertising plan.
Promotions
The promotions will involve roadshow promotions during the launch of the warehouse. Discounts and tokens will also be part of the promotions.
Managing Financial Issues
Start-up Cost
The maximum capital needed for the intended venture will be around $20 million, as the start-up capital that will cater to all the starting material and resources.
Financing
Since the Costco Warehouse Business is an international organization with a stable financial background, the intended business will just be an expansion. Therefore, the capital will be from its mother’s financial sources.
References
Becherer, R., & Helms, M. (2009). The Value of Business Plans for New Ventures: Company and Entrepreneur Outcomes. Journal of Small Business Strategy, 20(2), 81-96.
Costco: About us: Be valued, we promote from within. (2015). Web.
Foote, J. (2002). Cultural Consumption and Participation. Canadian Journal of Communication, 27(2), 1-15.
Jamali, D., & Mirshak, R. (2007) Corporate social responsibility: Theory and practice in a developing country context. Journal of Business Ethics 72(3), 243–262.
Kamala, G., Vipin, G. (2006). History, ownership forms and corporate governance in India. Journal of Management History, 12(2), 185-198.
Perry, S. (2002). The Relationship between Written Business Plans and the Failure of Small Businesses in the U.S. Journal of Small Business Management, 39(3), 201-208.
Reza, R., & Catherine, M. (2015). Public Interest in the Regulation of Competition: Evidence from Wholesale Internet Access Consultations in Canada. Journal of Information Policy 5(2), 32-55.
Saeed, M., & Arshad, F. (2012). Corporate social responsibility as a source of competitive advantage: The mediating role of social capital and reputational capital. Journal of Database Marketing & Customer Strategy Management 19(1), 219–232.