LED560 SLP #1

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Trident University International *

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Feb 20, 2024

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1 Trident University LED 560: Leadership and Strategy SLP #1: The Strategic Compass

2 Costco Wholesale Costco Wholesale is a massive retail outlet having a global presence of over 800 stores located in 10 countries worldwide. They pride themselves on having around 15% of the stock keeping units (SKU) that most supermarkets have while proving products based on quality, price, brand, and features (Costco Wholesale Corporation, n.d.). This company has grown massively since its creation in 1984 and offers a unique way for members to purchase bulk products at lower costs than normal stores. As a Fortune 500 company, they strive to be very competitive and continue to grow and expand outwards. Costco has a strong mission and vision statement in which they use their code of ethics and values to keep strong within all aspects of the company. In this paper, there will be a discussion about Costco’s mission and vision statements, a critique of the mission and vision statements, and discussion about how they could change their mission and vision statement to be better. Costco’s Mission Statement and Vision Statement As a wholesale supermarket, Costco has been built up as a company that offers extraordinary products that are of great quality and features. To be able to get any products from Costco, either online or in person, a membership must be applied for at which a member must pay an annual fee which ensures that the company is able to provide its selective services and keep their quality and customer service at peak levels. Their mission statement is “to continually provide our members with quality goods and services at the lowest possible prices” (Costco Wholesale Corporation, n.d.). This mission statement is followed by a vision statement of “a place where efficient buying and operating practices give members access to unmatched savings” (Parker, 2023). Costco does this by maintaining four company values, 1. obey the law, 2. taking care of members, 3. taking care of Employees, and 4. respecting the suppliers. If Costco can do

3 these four things throughout the organization, then they will be able to achieve their ultimate goal, which is to reward our shareholders (Costco Wholesale Corporation, n.d.). By following this mission statement, vision statement, and values, the company has created an exceptional reputation of taking care of its members and employees, was able to rake in a profit of $5B in revenue and recognized as #12 on the Fortune 500 list (Parker, 2023). Critique of Costco’s Mission and Vision Statement Costco’s mission statement is pretty strong and keeps true to their organization’s desire to provide the best quality and quality to its members. In Mission, Vision, and Values, Dr. Cady identified 489 statements and concepts found in mission statements the number two statement was “quality” (Cady, Wheeler, DeWolf, & Brodke, 2021). By stating that the company is going to continuously provide quality goods and services, Costco is showing customers and members that they are going to have quality products and if they are not good, they will provide quality services to make them happy. This statement is beneficial as consumers know what they are getting is valued by the company and not just some poor-quality product. While having quality in their mission statement, their ultimate goal is to reward shareholders which is not mentioned in their statements but rather in their ultimate goal achieved by using their code of ethics and values. While they have a strong mission statement, they do not have a very strong vision statement. Their vision statement does not give any look at how they are going to achieve the mission statement other than “give member access to unmatched savings”. As this mostly matches their mission statement, the vision statement seems to be stale and thus not needed for the company. A good vision statement would include their values and visions on how to accomplish their mission. With that said, the company values are focused on all aspects of the company. Any leader stepping into the company knows that the company values are there to

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4 accomplish the mission and straying away from those values hurts the ultimate goal of the company. Additionally, the combination of the mission statement, vision statement, and values help a leader to be able to use the strategic compass to run the company. The company is setting a strategic direction, one that must not be random or haphazard, an action that helps move the organization from Point A to Point B, setting a culture and climate of openness and trust, satisfying a societal need for job creation and employe demands, and a moral direction to be honest, fair, and open (Wilson, 1996). Rewriting the Mission and Vision Statements for Costco There are some changes that could be made to make the mission and vision statement for Costco that could strategically help the company out. “A mission statement is a corporate guideline that definitely encourages identification because it is rhetorically designed in order to ensure maximum employee buy-in (Williams, 2008). The new mission statement would be changed to “Provide quality goods and services at the lowest prices while providing quality service to members, employees, and suppliers”. This mission statement holds strong to Costco’s original mission statement while incorporating the company’s values and code of ethics. By making the change to the mission statement, Costco has the ability to change its strategy to be able to steer back any time there is an internal bump in the road. The next thing that will be changed is there will be two vision statements instead of one. The first mission statement will be “We will respect all suppliers to ensure quality products are provided to members” and the second one will be “We will take care of all members and employees, ensuring quality products and obeying all laws”. The upgrade to the vision statements will help improve the overall mission statement and will help meet the ultimate goal of the company, rewarding the

5 shareholders. With updated mission and vision statements, the company will get more buy-in from the employees around the world. Conclusion Costco Wholesale is a Fortune 500 company that has an optimized mission statement that allows for its employees, members, and suppliers to keep the company running as well as it does. Their mission statement shares one of the top two concepts found in mission statements in a study of Fortune 1000 businesses with an ultimate goal that matches the number one concept in that study. The company was ranked 12th in the 2021 listing, and it holds true to its values and mission statement. While it has a good mission statement, there could be tweaks to the mission statement and vision statement that would make it easier to incorporate different strategies needed if change was needed. In this paper, there was a discussion about Costco’s mission and vision statements, a critique of the mission and vision statements, and discussion about how they could change their mission and vision statement to be better.

6 Reference Page Cady, S. H., Wheeler, J. V., DeWolf, J., & Brodke, M. (2011). Mission, vision, and values: What do they say? Organization Development Journal , 29(1), 63-78. Retrieved from ProQuest. Costco Wholesale Corporation. (n.d.). What is Costco’s mission statement and code of ethics? What is Costco’s Mission Statement and Code of Ethics? https://customerservice.costco.com/app/answers/detail/a_id/829/~/what-is-costcos- mission-statement-and-code-of-ethics%3F Parker, B. (2023, January 16). Costco mission statement: Vision: Core values: A detailed analysis (2023). Business Strategy Hub. https://bstrategyhub.com/costco-mission-statement- vision-core-values-a-detailed-analysis/ Wilson, I. (1996). The 5 compasses of strategic leadership. Strategy and Leadership , 24(4), 26- 31. Retrieved from ProQuest. Williams, L. S. (2008). The mission statement: A corporate reporting tool with a past, present, and future. Journal of Business Communications , 45(2), 94-119. Retrieved from EBSCO.

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