Introduction
Costco Wholesale is a well-known multinational chain of retail stores that sells various goods to people. The peculiarity of this organization is that it has a membership-only program that allows customers to make purchases (“What is Costco’s mission,” n.d.). Here, you can buy various products, clothes, and other items much cheaper than in regular retail stores.
In terms of management and working relationships, the company was recognized as the most ethical among its competitors, such as Walmart or Target. Nevertheless, some cases proved the fallacy of his reputation and emphasized that even one of the most developed retailers cannot comply with all ethical standards. The organization is actively investing in charitable causes to contribute to the common good and raise awareness of different issues in the community.
Charitable Cause
One of the significant charitable projects Costco Wholesale holds is donating products to the homeless and other needy people. Large retailers like Costco promote that staple products can be accessible to anyone, specifically to vulnerable groups. The primary company’s activity to contribute to the common good is donating leftover food to Feeding America, a non-profit organization providing products to food-insecure individuals (“A guide to Costco’s,” 2022).
Such a social cause is an excellent opportunity to avoid massive production waste and greatly help those in need, which is the mission and vision of Costco (“A guide to Costco’s,” 2022). In addition, Costco offers a chance to help its customers, corresponding to its primary value – helping people. When entering the store, the clients can see food donation bins where they can put whatever they decide to buy for the food-vulnerable population.
SWOT Analysis
Strengths
To dwell on the benefits of the social cause in more detail, it is vital to conduct a SWOT analysis. The primary strength of Costco Wholesale is its ability to maintain high-quality products by selling them at low prices, including low margins. The corporation has its loyal customer base due to its convenient membership program and other perks. Moreover, the company only spends a little money on advertising and other marketing initiatives to keep operational costs low while funding finances to help people. The distribution turnover is quite high as well because Costco is in the top twenty of American pizza chains.
Weaknesses
On the other hand, like any other company, Costco Wholesale has some weaknesses. For example, the retailer does not offer many individual product choices despite the number of brands represented in stores. Furthermore, the transportation costs are high, making the delivery process slightly lagging. Despite the company’s aim to be an international retailer and equally supply products to different countries, Costco is not quite successful at it. This statement owes to the fact that the corporation only has warehouses in the U.S. and Canada, leaving other countries behind. Moreover, e-commerce is underdeveloped, meaning online services function poorly. Finally, the level of investment in development and research is quite low compared to Walmart or Target.
Opportunities
Nonetheless, the company has immense potential in developing several aspects. For instance, the retailer should improve its online presence as it can benefit its promotion and increase sales. Moreover, it is possible to expand the customer base through digital advertising.
Costco can post its ads on social media like Facebook or Instagram. Focusing on marketing healthy and ecologically clean products can be an opportunity for Costco since a median modern customer cares about their health. Consolidation strategies should be implemented for taxes to reduce transportation costs. Ultimately, by means of marketing, the company can promote its charitable causes to attract more volunteers and investments to its charity projects.
Threats
The potential for opportunities is high; however, it can be threatened by external factors. For example, political uncertainties can quickly impact the company’s development. In addition, the retailer is facing a threat due to frequent exchange rate fluctuations, which implies that its international operations may be lagging. In these terms, Costco concedes to Walmart and Target, which diverts its customers.
The company regularly encounters economic issues, which signifies that dependence on it results in lower sales. In addition, the unwillingness to invest in research and development makes the retailer more technologically vulnerable. Regardless of these impediments from external factors like the economy and politics, Costco is more likely to implement a wise approach towards intensive rather than extensive development.
Social Cause, Opportunities, and Threats
Costco Wholesale supports its strengths and opportunities by participating in the food donation project. Primarily, it boosts the loyalty of customers – seeing how caring the retailer is, people will come back and bring new clients to the store. It also shows that products can be of high quality at low costs, which enables anyone to make purchases.
Undoubtedly, this charitable event promotes the company’s participation in other similar causes and can take it to the online level. It means Costco can start raising funds online to help people in need. In addition, the risk of economic insecurities is reduced due to investments in community development. In other words, Costco contributes to increasing the population’s standard of living and eliminating the threat of financial problems.
Ethical Principles
Costco adheres to some major ethical principles while helping people with food. Primarily, it is integrity – the company acts out of its interest to assist those in need altruistically. In addition, the retailer follows the principle of respect as it is its principal value (“A guide to Costco’s,” 2022). No matter what groups of people Costco helps, it shows deference to everyone.
What is more, Costco realizes its charitable project on food donation based on the ethics of virtue. The most significant aspect of this framework is the sincere acceptance of a specific range of considerations as grounds for action. Therefore, by maximizing the good and minimizing harm to itself, the company is successful at helping individuals and gaining its reputation.
Internal and External Impacts
Regardless of benevolent intentions, internal and external factors always have either a positive or a negative impact. Internally, the company benefits from the selected charitable cause by avoiding food waste and limiting the amount of recycling work for employees (“A guide to Costco’s,” 2022). On the other hand, some workers from vulnerable groups could collect leftovers for their families.
Externally, the company will benefit from this social cause as it will recommend itself as a responsible organization that can invest in the improvement of communities. In addition, this participation is likely to impact the retailer in a way that attracts new customers. Otherwise, Costco can get inspired to invest in more research in social media development, as there is a growing interest in it as a charitable venue.
Ethical Challenges
Despite the benevolence of the company’s intentions to the outer audience, food-insecure groups, Costco Wholesale may face ethical challenges in relation to its employees. For instance, the workers may complain that they are not treated with respect as they are made to give out food to vulnerable groups while being their representatives. What is more, the employees may face a toxic working environment.
It signifies that they could be forced to work extra hours without proper payment or be pressured by the managers to work harder to meet others’ needs in excess (“What is Costco’s mission,” n.d.). It can be a result of conflicting or unrealistic goals in relation to its charitable cause. If the company sets a goal of donating money from the employees’ salaries, much resentment can be expected.
CSR Programs
The concept of corporate social responsibility (CSR) assumes that the company voluntarily assumes additional obligations to society. That is, it pays taxes and produces high-quality and safe products and invests in its employees, the environment, and the territory of its presence. For Costco Wholesale, it is indispensable to participate in CSR programs to improve the internal and external environment (“What is Costco’s mission,” n.d.).
By donating products, the retailer contributes to the development of the community. In addition, CSR is about boosting the brand’s image and reputation. Costco is an international retailer, so it could develop itself more intensively in different markets, thus raising its visibility. Ultimately, it alleviates business-leading conditions because it allows for more transparency.
Conclusion
To sum up, Costco Wholesale is an international retailer that provides high-quality products at low cost through membership programs. The company is renowned for its affordable products and contribution to the social environment. Costco donates products to Feeding America, a food bank for those in need. This charitable cause is famous for its organization of such scope because it allows for improving the lives of the communities and supports economic growth.
In addition, it boosts the company’s presence in the industry and enables it to invest in more charitable events and other developmental activities. Nonetheless, Costco should not disregard its employees’ needs in terms of charity, as some of them are exposed to food insecurity. Therefore, participating in CSR projects can boost the internal and external environments and greatly benefit Costco Wholesale.
References
A guide to Costco’s donation program for non-profits. (2022). theshareway. Web.
What is Costco’s mission statement and code of ethics? (n. d.). Costco Wholesale. Web.