Costco Wholesale In 2012 Essay Example | Topics and Well Written Essays - 750 words

Costco Wholesale In 2012 - Essay Example The philosophy of the Costco is to be concerned with customers and employees and meeting their needs which in the long-run results to rewarding of their shareholders. Stakeholders have invested a lot of their money in the company. They have faith that Costco will invest wisely and despite the ups and downs, the business has operated in profitable ways. Costco has inventories traded publicly on the NASDAQ stock exchange market. The stakeholders therefore get good returns from the company. Porters Five Forces Model has five forces which include: The threat of substitute products. This can be a strong threat especially considering there is e- retailing and websites like costo.com in Canada. It therefore limits the profits that a company could actualize and the amount of sales. The bargaining power of suppliers is moderate to low competitive force. Costco has many warehouses and therefore it requires many suppliers. However there is no supplier who can singly influence the pricing of raw materials or even striking due to financial instability. Instead, the suppliers compete for the supply orders despite the poor terms and conditions of trade. This reduces their bargaining power. Bargaining power of customers is a weak threat because Costco is a large retailer which even sells its products in bulk. Most of the members purchase products in small amounts as compared to the whole stock. One member has very little or even none influence on the quality and prices of products sold by the company. Even if the member results to quit the company and go to the competitor of Costco will have no effect on the sales volume of the company. Threats of new entrants are low considering that Costco has already established itself and it offers low prices of its products. This discourages any new entrant because it cannot reduce prices below the ones existing in the market.

Environmental Issues in Business Transactions Essay

Environmental Issues in Business Transactions - Essay Example In January 2000 after finalizing the purchased amount of seven million dollars and obtaining the assurance of Tyco that the Plant is compliant to existing environmental laws Shan finalized the acquisition of the Plant from Tyco. To reiterate this assurance the purchase contract stipulated that Tyco â€Å"will be responsible for any losses arising out of environmental clean-ups, fines or penalties†. After the purchase of the Plant, Shan discovered that it would cost more than two million dollars to make the Plant compliant to federal and state environmental laws. Shan also discovered that the potential fines and penalties for the non-compliance to environmental state and federal laws could amount to more than one billion dollars. Shan thru its owners tried in several instances to persuade Tyco to buy back the Plant at the same cost or pay for the necessary remediation cost to make the Plant comply with state and federal environmental laws. ... the final report was sent to the Chief Executive Officer of Tyco, the report was accompanied by a request from Shan for assistance in making the Plant compliant. However, Tyco ignored the report including the request. Thereafter, Shan reiterated its offer for Tyco to just buy back the Plant for the same amount it was bought to which, Tyco declined. In December 2003, Shan voluntarily reported to the Environmental Protection Agency that the Plant is not compliant to state and federal regulations. At around the same time Shan also met with the Tyco officials who promised to send documents that would prove that the Plant was in compliance with the regulations set by state and federal laws. Perusing over the documents sent over by Tyco it was determined that Tyco was not doing its responsibility to make sure that the Plant are compliant to regulations under state and federal environmental laws. On the last day of 2003, they filed a case against Tyco for breach of contract. In April 2004, the Plant was visited by state and federal environmental authorities and naturally found it non-compliant to environmental laws. It was determined that it was Tyco who suggested that environmental auditors examine the Plant. Based on their findings the state and federal environmental authorities issued a cease-and-desist order that affected forty percent of the Plant’s operating capacity. That could have greatly diminished its earning capacity thus its initiative to make the Plant compliant to environmental state and federal laws. In June 2004, Shan appealed the cease-and-desist order by asserting that the environmental problem was an issue inherited from Tyco, the previous owner. The appeal contained the findings of the independent consultants showing the extent of the violation in the