Heading 2 Heading 1 Normal No Spacing A Retail is one of the most competitive and stingiest industries in America boasting some of the most dissatisfied workers across the board. Walmart Stores employees began a week-long strike in Miami, Boston, and the San Francisco Bay Area to publicly display their immense dissatisfaction with the multinational corporation. Employees at Amazon.com fulfillment center in Leipzig! Germany went on strike demanding higher wages and better benefits. Just search retail strikes and you will find numerous examples of dissatisfied employees doing what they can to improve their situations. However, there is one company that will not appear on the list - Costco Wholesale! Costco Wholesale, the second-largest retailer in the U.S. behind Walmart, is an anomaly in a world where retailers are closing their doors due to the inability to compete with online prices. Retail stores such as Aeropostale, Sears, and Macy's are all feeling the pressure of the online marketplaces of today's digital world. Costco requires a $55-a-year membership fee for access to its massive warehouses supplied floor to ceiling with generous portions of everything from olive oil to paper towels. While many businesses are losing customers to the Internet Costco's sales have grown 40 percent and its stock price has doubled. Treating employees exceptionally well is the secret to Costco's success. Costco employees make an average of $20 an hour, not including overtime and eighty-eight percent of Costco employees have company-sponsored health insurance. Costco treats its employees well in the belief that a happier work environment will result in a more profitable company. It is obvious Costco is thriving in one of the toughest retail markets in history. The style of Costco is minimalist with no-frills industrial shelving stocking the 4,000 different products. Products are marked up 14 percent or less over cost. Items like diapers, suitcases, and tissues, which it sells under its in-house Kirkland Signature brand, get a maximum 15 percent bump. After accounting for expenses such as real estate costs and wages, Costco barely ekes out a profit on many of its products. Eighty percent of its gross profit comes from membership fees; customers renew their memberships at a rate of close to 90 percent. "They are buying and selling more olive oil, more cranberry juice, more throw rugs than just about anybody," says David Schick, an analyst at Stifel Nicolaus. And that allows Costco to get bulk discounts from its suppliers, often setting the industry's lowest price. Even Amazon can't beat Costco's prices, which means that "showrooming." or browsing in stores but buying online for the better price, isn't much of a concern for Costco. The company's obsession with selling brand-name merchandise at cut-rate prices occasionally gets it into trouble. Tiffany filed a multi-million-dollar trademark infringement suit against Costco allegingitimmonenlabeled merchandises Tiffany engagement rings Costco calls it an honest States) "They are buying and selling more olive oil, more cranberry juice, more throw rugs than just about anybody," says David Schick, an analyst at Stifel Nicolaus. And that allows Costco to get bulk discounts from its suppliers, often setting the industry's lowest price. Even Amazon can't beat Costco's prices, which means that "showrooming," or browsing in stores but buying online for the better price, isn't much of a concern for Costco. The company's obsession with selling brand-name merchandise at cut-rate prices occasionally gets it into trouble. Tiffany filed a multi-million-dollar trademark infringement suit against Costco alleging it improperly labeled merchandise as "Tiffany engagement rings." Costco calls it "an honest mistake" and re-branded the label "Tiffany-style." The suit is pending. CASE STUDY QUESTIONS 1. Imagine you are working for Costco as a manager in its Chicago store. Your boss does not understand the difference between data, information, business intelligence, and knowledge. Using examples of products and services available at Costco provide examples of each to help your boss understand these important concepts. 2. Explain why it is important for Costco's corporate accounting, marketing, and operations management business units to access and analyze information about your store's sales. What could happen if your store sales were not shared with the different business units at Costco's headquarters? 3. Explain systems thinking and how MIS solves the issue with information silos throughout Costco's entire worldwide organization. States)