Costco Audit

I have chosen Cost as my focus, which is a large player in the Wholesale industry that vows to be fair to everyone involved in their business. The company strives to do things the right way which will be proven through the analysis of their Mission Statement, Press Releases, and a Forbes Article. Mission Statement: The Cost mission statement is short and simple. Cost states that their main priority is to provide members with quality goods and services at the lowest prices but that they will do so without risking their Code of Ethics like some competitors do.

They vow to always obey the law, take care of their members and employees, and do right by their vendors. The mission statement really hits home by appealing to Ethos, Pathos and Logos. The size of Cost as a company sets the Ethos. By being so public with this mission statement it puts them under the spotlight and really lets people know they are confident that they will always maintain this business practice. This not only further sets their Ethos but also builds on Logos. It is the logical choice to shop at a Cost because they guarantee that they will always treat their members well.

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Last but not least, the Mission Statement of Cost appeals to Pathos. Cost is treating people and business the way they are supposed to be treated and by shopping at Cost you are supporting the fair treatment of vendors, customers, and employees. Press Releases: The first press release that I analyzed was one they put out after the major earthquake in Japan back in 2011. The press release begins with Cost informing media that their first course of action was to find and account for all of their employees. Then they checked to make sure their facilities had survived.

Only one of heir nine facilities had significant damage which resulted in two deaths. All facilities were double checked by both Cost personnel and independent third-party experts before re-opening. The one facility that suffered significant damage remained closed for several months so that Cost could run more inspections and make sure all the repairs were done and that the facility was truly safe for members and employees. To assist in the relief efforts, Cost also started collecting donations for the Red Cross/ Red Crescent Relief Fund.

This was active in all 581 warehouses that span countries around the world. This press release really shows that Cost is doing everything they can to ensure the safety of customers and employees as well as their support in relief programs. The fact that only two people were killed among the hundreds that were dispersed among their nine facilities also shows that Cost has good disaster prevention procedures. Http://pHs. Corporate-IR. Net/phoenix. CHTML? C=83830&p=irol- newscasters&lD=1 The next press release I analyzed was on the humane treatment of animals used to supply their shops.

The release is Cost apologizing and taking full blame when it came to light that one of their vendors was striating animals. The company expresses they were not aware that it was going on but that they were extremely disappointed that their routine checks did not find out about this. The press release then goes on to express that Cost will be more vigilant in the future and will make sure an incident like this doesn’t arise again. The press release shows that Cost isn’t going to deny that incidents happen to try and blame themselves for allowing it to happen.

They hold themselves and their customers to a higher standard and will do what is necessary to right the wrongs. Http://pHs. Corporate-IR. Net/phoenix. CHTML? C=83830&p=irol- The final press release that I analyzed was about a $3 billion dividend package. Cost announced that they were devoting $3 billion of net proceeds to offer a special cash dividend to any shareholder with common stock. This equaled out to $7. 00 per share. Cost proves with this financial move that they are a company dedicated to their customers rather than their own success.

With the normal quarterly dividend averaging around $0. 32 it really shows Cost’s dedication. They gave up a significant amount of money for the sole purpose of making their supporters even happier with the business they are doing. Http://pHs. Report- IR. Net/phoenix. CHTML? C=83830=irol-newsArticle=1762664= Forbes Article: The Forbes article points out several things that Cost is doing better than its largest competitor, Walter. Walter has been expanding their store front by 13 percent while decreasing the amount of workers they currently employ.

The result is a less service that is driving more and more customers to become members at Cost. In addition to the recent 1. 4 percent roster cuts, Forbes points out that Walter continues to pay their employees next to nothing. Meanwhile, Cost employees, on average, make around $30,000 a year. Cost also exhibits nearly double the rate of sales per employee than that of Cam’s Club, another wholesale company operated by Walter. After reading the Forbes article it is easy to understand why Cost gained an addition $70 million in membership sales in a single quarter.

Cost understand that putting workers in crummy, low-wage Jobs tends to yield crummy service as well. Cost has combated this with their mutually beneficial plan to make both employees and members happy. Http://www. Forbes. Com/sites/racking/2013/04/17/Walter- pays-workers-poorly-and-sinks-while-cost-pays-workers-well-and-sails-proof-that- oh-get-what-you-pay-for/ Analysis Conclusion: Through my analysis it was clear that Cost maintains its dedication to its Mission Statement.

The company will not tolerate any malpractice or shady business from its vendors and guarantees the best of products for low costs to its members. All the while, Cost is making both employees and shareholders financially happy so that a members experience at one of their wholesale stores is a good as can be. Cost is a company that will do what is necessary to make all parties involved satisfied with what they are doing.

Jesse
from Nandarnold

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