However, there are certain aspects regarding quality that the company can improve. The objective of Costco is to improve quality of products and services while reducing their price. This is a difficult objective to reach, given the fact that high quality is usually attributed to higher prices.
Therefore, Costco understands that it must work on technological aspects in order to improve the quality of its process and maintaining its cost effectiveness. In other words, the company invests in technological developments that allow Costco to continuously improve the company's efficiency and productivity. These technological developments are also intended to improve the work conditions of employees, which leads to improved performance. In addition to this, technological developments reduce the risks and errors within the company's processes (Daft & Marcic, 2008).
Another aspect of great importance to the company that requires quality improvement is represented by Costco's supply chain management. The retailing activity requires efficient supply chain strategies. The company must determine the most suitable inventory levels in accordance with its activity and customers' requirements.
There are several strategies that can be applied in order to increase the efficiency of the company's supply chain. Costco's efforts regarding its supply chain improvement should be directed towards its inventory levels. This means that the success of such strategies depends on inventory management.
The competition in this business sector is intense, and Costco must develop flexible strategies that allow the company to sustain its competitive advantage. Therefore, Costco must compare its activity to that of its competitors in order to establish its performance on the market. In this case, companies use the benchmarking process. Benchmarking is represented by continuously measuring the company's products and services...
Costco's practices, processes, and activities are also analyzed by using the benchmarking method.
In order to obtain suitable results, it is recommended to analyze competitors of similar size, with good position on the market, and that address similar market segments. Based on these comparisons and their results, Costco can identify the areas that require improvements (Encyclopedia of Business, 2011). There are several types of benchmarking that must be used in accordance with each situation. In the case of Costco, it is recommended that the company addresses competitive benchmarking. This is because this method allows Costco to analyze the market share, customer levels, customer satisfaction, and others. This information can be used in developing and implementing strategies intended to increase the company's market share.
In addition to this, Costco can use the benchmarking method in order to analyze its structure, processes, and activities. This method is based on comparing different processes, functions, and procedures within the company's departments. The objective of this analysis is to determine how different departments within the company work, how they are managed, and what their performance level is. This means that the company can identify successful processes within the company and analyze the factors that influence their performance. Based on these studies, the company can expand such processes to certain departments and develop important strategies.
Reference list:
1. Control Charts (2010). SQC Online. Retrieved March 27, 2011 from http://www.sqconline.com/six-sigma-control-charts.html.
2. Daft, R. & Marcic, D. (2008). Understanding Management. Retrieved March 27, 2011.
3. Quality Control (2011). Encyclopedia of Business. Retrieved March 27, 2011 from http://www.referenceforbusiness.com/small/Qu-Sm/Quality-Control.html.
