Executive Summary

This article has concentrated on the well-known store COSTCO for its research. The succession plan and other strategies of the firm are matters that are mostly kept confidential by the firm. Some of the more recent shifts that have taken place at the company may be seen in the executive ranks. Analysts believe that a succession plan may be in the works at COSTCO, given the recent appointment of Ron Vachris to the chief operating officer and president position.

Background Information

Firm History

In 1983, Costco opened a store in Seattle. Jeffrey Brotman and James Sinegal, the company's founders, originally intended for it to offer low-priced, premium brand-name goods to small companies. Still, they eventually realized that the consumer market had tremendous promise.

Costco was acknowledged as the first business to accomplish a zero to3 billion dollarsales increase in six years within six years of its debut (Mak et al., 2014). In 1985, Costco offered publicly traded stock to the public at a priceshare of 10 dollars. The company exploited its outstanding performance to entice potential investors. Because of this investment, the company expanded rapidly into domestic and foreign markets because of this investment. Costco andPrice Clubcombined their names in 1993, and thus the resulting company became known as PriceCostco. It had 206 locations and 16 billion dollars in annual sales. The idea of membership to Costco was also conceived as a result of the merger. The True Earnings credit card was established in 2004 as a joint venture between American Express and Costco. During this period, Costco was ranked as the fifth biggest retailer in the USand the twenty-ninth most successful company by Fortune 500.

Through expansion and dedication to the excellence of its products and personnel over the last ten years, Costco has maintained its success. Costco was recognized as among Fortune magazine's most admiredfirms in 2007and 2006. The business has 592 sites worldwide as of 2011 and generated $77.9 billion in sales annually. With 648 warehouses, the firm's sales in 2013 climbed by 6% from the previous year to 103 billion dollars. Costco was recognized as the biggest wholesale club in operation in the USas of June 2014.

Situation Analysis

Analysts believe that the actions taken by Costco Wholesale Corporation, which include the new change in the executive management, indicate that the company is making preparations for a potential succession to its current Chief Executive Officer. Ron Vachris, a seasoned executive, was elevated to Chief Operating Officer andpresidentby Costco, indicating a succession plan. The firm announced in a regulatory statement on Thursday that the promotion became effective on February 2 and that Vachris, 56, would also be on the B.O.Dto fill a newly formed vacancy (Case, 2022). Concerns have been raised over COST's succession planning. The retailer's revelation significantly contributes to clearing up any uncertainty over Jelinek's succession plan after his impending departure. This news should alleviate investors' worries regarding a managerial transition once Jelinek chooses to retire.

Needfor Change

As seen, various previous changes have occurred Costco. However, the company requires further changes in order to remain competitive. Therefore the company needs toupdate the procedures and policies that need to be altered as time goes on for Costco's human resources structure and components. As a novel move, a firm needs to alter its employee relations strategy and remuneration structure (Gupta, 2001). The business and senior level management system make the necessary adjustments to the working hours.At Costco,Kotter'seight change management phases areneededfor change that will be implemented in thecompany's processes andsystem. Walmart competes with Costco, a wholesale business that trades in a variety of goods. Competition is athreattothe businessandmanagers and supervisors are always looking forexpansion opportunities.Many employeesworkfor Costco all over the world, and the company's typical remuneration structure needs to be adjusted because the working hours are 10 hours per day, four days per week. The Costco human resources manager can identify specific actions that will enhance theorganizational structure as well as the laws and regulations of the human resources division.

The Change Process

Kotter's (2007) change management techniques aid in the efficient implementation of change. One person cannot work with the same technology and factors sincethis restrictschange. There are some situations where a person simply must accept change as it comes. Effective results require change management steps, thus given the pace of technology, change can be managedandembraced. Costco has to strengthen its product line and stage of development given thebreadth of itsproductofferings. Customers are becoming more and more demanding, and they want the best from the business. In this situation, ensuring customer satisfaction is essential, and there are instances in which Costco tries to alter the fundamental activity that contributes to growth. Costco has a brighter future as a result of implementing Kotter's change management step.

With the help of effectively established methods, the eight stages of change are detailed in depth. Workplace hiring and staffing procedures need to be revised to reflect the precise roles and responsibilities of a business. For better customer service, the systems and procedures need to be altered. As a means of transitioning from the existing state, the desired level of change is assumed, and tools and procedures that are necessary for the desired state are implemented. On every level, there are several theories of change that need to be predicted, and Costco needs to put the best theory into practice. Wherever change is required, diagnostic models are examined as part of the change management process. The primary criteria for change at Costco are employee involvement, wage structure, and working hours. The appropriate strategies that must be developed at Costco are mentioned alongwith the eight steps to change.

A sense of urgency is established

Kotter states in the first step that proper change plans must be conveyed. Individual cooperation is crucial since it aids in the transformation of an organization as a whole. Both management and staff must be committed to the change process. In Costco, developing techniques for creating a sense of urgency is essential, but employee engagement strategies are created with participation in mind. The management lives on persuasion, and meetings are set up to persuade as many members of the management team as possible. Because this stage marks the beginning offundamental transformation, there are risks and difficulties at this specific time. A companytendsto become too big for its potential rewardstooutweigh its risks, so it is imperative to take steps to strengthen the structure now because there may be an opportunity down the road.

Creatingcooperation

When Costco creates such tactics where the team members are driven and have faith in one another, this is the next stage. The team must possess the strength to handle the risks and challenges that come with some of the chances and strengths that have already been described. The techniques presented here will helpmanagersbecome more credible leadersand accomplishtheirgoals. It is possible to create off-site events to help theteamreach its goal.

Developing vision and strategies

Plans for Costco include a clear goal as well as any necessary changes to current operational procedures. The project plan for each participant to engage in the project includes some fundamental qualities of an effective vision. Costco needs a change management strategy for its human resources division that focuses on hiring, paying, and scheduling employees' hours. These are expressly addressed in the project plan, and the necessary steps are clarified with regard to the most efficient ways to bring about the desired changes within an organization. The vision plan's features, which include being feasible, imaginative, desirable, communicable, and concentrated, need to be narrowly defined. These components must be present because they best support the goal of transformation in a company (Mitroff, 2004).

Communicating the vision

The vision statement for Costco outlines precise goals that must be metin orderfor change to occur. It is now necessary to regularly communicate the projected vision statement to the company's management and staff. To achieve the desired results, management must effectively remind employees of this ongoing step.Various tacticscan be used to complete communication tasks successfully, but among them all, storytelling is well-liked by businesses.

Empowering the actions

Members are the only ones who need to carry out the management's decision on the vision. The team coalition needs to be thoroughly examined to determine whether the procedures and tools required to realize the vision are adequate for team members or whether they require an improvement in some tools and methods for change. Undoubtedly, human resources are accountable for attaining these objectives, but the information and technology system bears a disproportionately large share of theburden.The vision plan can only be realized with the help of technology.Correct use of technology must beenactedto access informationandfacilitate the exchange of information that contributes to market knowledge and even the present position ofrivals. This step requires developing strategies, such as regular use of technology.

Generating short-term wins

Long-term initiatives can lose steam, so it's crucial to concentrate on short-term goals that inspire staff to make changes. There is a natural propensity to resist and accept long-term change when short-term successes are seen. Therefore,Costco needsto focus on making quick changes.

Producing change and consolidating gains

When a business declares victory before fortifying change, it is responding. The leadership coalition requires a deeper comprehension that will result in change on a larger scale, thus it is important to keep the urgency of change in mind while concentrating on the vision. Previous quick wins are used as motivation for team members and leaders. To enable new leaders to promote each to a crucial role, leaders must explore how to produce more change. After achieving its short-term objectives, Costco now thrives on achieving its long-term objectives. Employee engagement and decision-making strategies can be developed to accomplish this step.

New approaches to culture

There are new strategies that Costco needs to implement, as a result of change and a requirement for improved organization.Change mustbe implemented, but if staff are unable to adapt, a business will not endeavor to implement change.To achieve the goals and objectives of the firm, new techniques are thus ingrained in the culture.

These eight steps for change management at Costco are a successful technique to change human resources and ensure that necessary tactics are implemented consistently. Even more important in attaining the greatest results are information and technology. Each department is properly diagnosed as needing change, and the methods and tools required to improve change are described (Cohn, Berman,Chaiken, Green, Green, 2009). Employees and leadership coalition initiatives are crucial to the vision plan. Costco analyzes the theories of change management in a way that is appropriate for bringing about change in an organization.

Results

The Costco change strategyis aimed at improving worker job satisfaction and the quality of the business processes. Costco adopts a unique business plan for its long-term revenues, prospects and evaluation of its shares to achieve a profitable business venture. The change process keeps the firm competitivebykeeping its rates friendly and selling its membership to cover future sales(Kumar,Kar&Mishra, 2022). Generally, the case shows thatbyproviding a suitable price for its membership, the firm isina position of increasing its profits.

Furthermore, the change initiative will be significant for removing barriers. Barriers are the current compensation structures that do not motivate the employees to generate quality services. Costco should adopt a suitable compensation strategy that is aimed at minimizing risks and increasing the company's incentives.The company's incentive element should be associatedwithachieving the product quality objectives. In addition, providing improved benefits might be vital for achieving job satisfaction by improving employee-worker conditions.

With the evolving business dynamics,there has beenaneed to revise the company's business strategy. There has beenaneed for Costco firm to adopt a business model that meets the changing dynamics during expansion.Partnering with other companies in already existing markets could help the company increase its profitability. The firm's management has the role of making critical decisions for the business that affects its business model.

Some of the outcomes from the Costco change process include;

Increase in the firm's revenue

Increase in the membership base

Increase in employee satisfaction

Positive scores on the client review sites

Decrease frontline worker retention rate

Increase in customer satisfaction

Some of the outcomes affecting the company can be measured through the use of statistical data(Chen, 2021). For example, the decrease in client defections canbeanalyzedbycomparing the post-change and pre-change numbers. Besides, other outcomes such asanincrease in worker satisfaction can be evaluated through the use of questionnaires.

Conclusions

The current business environment requires companies to remain innovativebyensuringtheoptimization of their business operations and implementation of new strategies that are more efficient to the business practices. This is witnessed in the warehouse retail industry which is dominated by several grown companies that adopt strategies to achieve competitive advantage. To remain competitive Costco needs to remain committed to the idea of achieving quality improvement. High-quality customer service results are ideal for achieving customer satisfaction. This shows that onlyafewer clients would be dissatisfied with the services they acquire from the firm. Besides, the company's membership would increase as a result of positive word of mouth. As a whole, increased membership would lead to increased profits and allow the organization to expand to international markets to achieve growth.

References

Chen, J. (2021). Marketing strategy management of Costco: Analysis and comparison to S-Group.

Kumar, A.,Kar, S. K., Mishra, S. K., Bansal, R., &Harichandan, S. (2022). Costco wholesale: the global expansion dilemma.Emerald Emerging Markets Case Studies.

Case, B. (2022, February 3). Costco Elevates Vachris to COO, Board in Sign in Succession Plan. Retrieved from Bloomberg: https://www.bloomberg.com/news/articles/2022-02-03/costco-elevates-vachris-to-coo-board-in-sign-of-succession-plan?leadSource=uverify%20wall

Maestri, N. (2010, February 2). Costco seen planning for succession with COO post. Retrieved from Reuters: https://www.reuters.com/article/costco-idUSN0224083320100202

Mak, J., Luongo, C., & Ho, J. (2014). Business 478 Section D100 CASE SYNOPSIS FOR: COSTCO

Cohn KH, Berman J, Chaiken B, Green D, Green M, (2009). "Engaging physicians to adopt healthcare information technology." J Healthc Manag 54: 291-300

Gupta S, (2001). "Leading innovation change-the Kotter way." International Journal of Innovation Science 3: 141-149.

Henderson, G, (2011). "Transformative learning as a condition for transformational change in organizations." Human Resource Development Review 1: 186-214.

Kotter. J, (2007). "Leading change: why transformation efforts fail." Harvard Business Review Best of HBR 1-10

Mitroff, I.I. (2004). "Thinklike aSociopath, Actlike aSaint", The Journal of Business Strategy, Vol.25, No.5, p.42.

Taylor-Powell E, Renner M, (2003). "Analyzing qualitative data." University of Wisconsin Publications G3658-12). 5

Wischnevsky, J.D. (2004). "Change as the Winds Change: The Impact of Organizational Transformation on Firm Survival in a Shifting Environment", Organizational Analysis, Vol.12, No.4, pp.361-377.

can you provide appendix for case study above mentioned