[February 03, 2015] I was watching a televisions special on Costco the other night with my wife. She was captivated by Costco with their employees being so loyal and customers so happy. What is it that makes Costco so successful? Is it their business model or is it something else?
Warehouse clubs that sell merchandise at low cost and high volume have been around in the United States since Sol Price and his brother opened the first Price Club warehouse in 1976 in San Diego, California. Costco Wholesale Corporation – Costco – is the most successful warehouse club and was founded in 1983 by Jim Sinegal.
Most people have belonged to one of the many of these member-only clubs because of the great prices. But its success was not always guaranteed. The 1990s saw a boom in warehouse clubs and it took grit and determination for the Costco brand to steadily grow. Costco’s mission is to continually provide their members with quality goods and services at the lowest possible prices.
The core values of Costco played a significant part by giving the right foundation for its employees. They refer to these values as a “code of ethics:”
- Obey the Law
- Take care of our members
- Take care of our employees
- Respect our vendors
“Culture isn’t the most important thing, it’s the only thing.” – Jim Sinegal
Maintaining the growth of Costco has been a challenge. Its continued success will undoubtedly persist as long as its senior management continues to act as leaders and believe in their values. So far, they have done a great job.
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[Note] Some of its members are so dedicated to Costco that websites have evolved around them. This one in particular is very informative: http://addictedtocostco.com/