Free «Costco Social Responsibility Program» Essay Sample

Costco Social Responsibility Program

Costco is one of the most popular retailers in the United States as well as in the rest of the world. In order to shop there, a person has to become a member. The company is relatively new, but despite its young age, it was able to beat many competitors mainly because of its social responsibility program. The social responsibility program of the company focuses on many aspects such as caring about the employees, providing customers with the lowest prices, and supporting other important social causes.

The company was founded in 1983 by two people: James Sinegal and Jeffrey Brotman. In 1983 they opened their first store in Seattle using the name Costco. The company showed an unbelievable development and progress growing $3 billion in 6 years after its start. In 1993, the company merged with Price Club and got a new name PriceCostco. In 1997, the company returned to its previous name Costco. At the present moment, its sales exceed $64 billion a year (“Membership Information”). Costco ranks third among the retailers in the United States (after Wal-Mart and Kroger) (“Top 100 Retailers Chart 2014”).

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According to the company’s website, the company’s working philosophy is also its social responsibility program. The company aims to keep the costs down despite many suggestions to increase its profits (“World’s Most Admired Companies”). Even President Obama chose Costco as an example to other companies because Costco increased the salaries for its employees, and now they are getting around $21 an hour (“World’s Most Admired Companies”). Interestingly, the company’s website does not present a clear social responsibility program as it is divided into different sections. Nevertheless, if we were to outline it, we would focus on such aspects: the first one is the social responsibility toward the employees. For instance, there is a special website on the official one for the workers where they communicate. Second, it is social responsibility before customers. The Costco provides members with the link they can use to complain about unjust or unprofessional behaviour of the workers, so it will be noticed and taken care of by the management team. The same applies to suppliers who can also complain about unprofessionalism, and members can complain about suppliers, too. The third point is “keeping it simple”, which is the company’s philosophy (“Membership Information”). It means that the company tries to keep the prices as low as possible for its members without trying to maximize the profit. This way, it takes care of the members by showing them that they matter and that the company wants them to get the products at the cheapest prices possible. Fourth is loyalty, since the company keeps on working with the partners for many years and buys products from local retailers and producers. The fifth point is charitable donations the company makes. On the website, there is a possibility to fill out a form where people can ask for a funding or charity donation for a particular purpose, so the company can see, evaluate it, and provide those who ask with the finances. Last but not least point is responding to social expectations and changing the company’s policies in accordance with social demands.

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When it comes to current events of the social responsibility program, it is important to point out the low prices the company intentionally keeps. It is done on purpose in order to attract more members into shopping at the stores. Another current event that took place in 2010 was the adoption of the new policy concerning veil purchase. For instance, the company prohibited buying veil from that using crate-and-chain method of production (Allison). The company also implemented a new policy concerning pork suppliers in 2012 (Runkle).

Among other social responsibility actions, it is needed to focus on increasing the salaries for the employees. As a result, the workers tend to keep on working for the company for a long period of time, since they find the company’s conditions to be very beneficial for them. It helps increase professionalism and also makes people value the company more. It is a good example of stakeholders’ focus on employees when they show that they care about their employees and want them to enjoy their working time. It is a good promotion for the company that shows that stakeholders’ interests sometimes can be an effective advertising tool, too. Obviously, the company could keep the salaries as low as other companies keep it, but it decided to be different, and that was a good marketing strategy.

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The loyalty, which includes buying products from local retailers, is another example of social responsibility. This is a good example of marketing covered in the book because it enables the company to get a competitive advantage comparing to its rivals. For instance, the company establishes a strong local market that is willing to work with it and that provides it with better marketing opportunities.

The fact that a person could complain about unprofessionalism online, without waiting for the manager to come, is also a good point for the social responsibility program because it simplifies the process of providing people with the best services possible.

Nevertheless, there are three recommendations for the company. First of all, Costco needs to share more information because at the present moment it is rather difficult to operate the website and see what the company is doing for society. Second of all, it has to choose a particular area of focus. For instance, if it is interested in ecology, it can provide people with extra funding for the ecological causes. In case it is concerned with local development, it has to provide people with finances for that. In other words, the company has to determine the groups it is going to work with as well as special causes it wants to develop. The third suggestion is that the company has to include its social responsibility program into its strategy that would be clear, and the company has to speak about it more.

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Costco is a good example of a company that implements its social responsibility program well, taking care of employees, customers, and society in general. It shows the company’s interest in the workers by providing them with better salaries, and it also shows the company’s interest in the customers by providing them with an ability to complain online about the flaws and giving them lower prices. The company also funds social causes, and that shows that the social responsibility program of the company has many effective aspects.