External and Internal Environment Analysis

Costco
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Costco strategic analysis
As part strategic planning managers are required to carry out internal and external environmental analysis. This means that they have to look at both the internal factor at the firm and the external factors in the industry, to determine their best plan of action. These are crucial elements as they define the strengths that the company has internally and those that it has relative to the competition. Threats, weakness and the opportunities that could arise or those that exist are also considered.
Internal environment analysis
It is important to point out that the company relies one of the most brilliant business model relative to its size and customer base, which is low prices attracting a low profit margin. This also means that customers make high volume purchases; there is a high turnover inventory, effective distribution, effective operations, low costs in operations and a wide range of merchandise. However it also means that customers have to bear with low selection of quality merchandise. At the base of a very successful business is the ability to maintain a talented and committed staff base(Ayass, 2014). Costco benefits from a pool of highly talented, innovative and committed employees that deliver on the company objectives with quality results. The company has devoted part of it promotional activities towards that payment of the staffs and thus staffs are well paid at the firm to make sure that they are highly motivated. Staffs are also awarded several benefits that add to their payment making the staffs at the firm quite happy and in a position to deliver on the company objectives with a high level of integrity and commitment as their needs are met(Ayass, 2014).
The level of authority decentralization has also benefited the company in terms of management. Relative to the fact that, power is decentralization the company stands to benefit from quality feedback and better relations between the staffs and the authority. Decision making also takes shorter time as well as complaints(Ayass, 2014). The company has also adapted environmentally friendly operation, such as timed lighting and solar powered offices. This goes along way into helping the staffs and the customers associate with the company objectives as they feel that they are part of a positive impact not just at the company but at the global level.One of the most crucial elements of the internal environment at the company is the corporate culture and the incentive systems that have been established. The company observes basic norms that allow s...