Costco Corporation & Toyota Motors Discussion Review Hi Ryan , we give comment for each submission from other people for the paper that we did about StabucksSmply agree or disagree like or not ?Please see attached images The article “Costco is a Victim of it’s Own Success” states that Costco’s sales in the past have been so high, that it may be hard to keep up the momentum in 2019. Consistent earnings have sent Costco’s stock up thirty percent, and have been stated to be a
‘victim of their own success’. Given that the company has such positive results in recent years, 2019 may show a plateau for the company. In January of 2018, Costco closed sixty-three Sam’s Club locations, which added to the increased growth to
Costco sales. Wells Fargo projects single high digit growth, however, others feel that 2018 may have been the peak for Costco Wholesale (Duggan, 2018).
This article relates to this week’s readings because chapter four discussed short and long term financial planning. The text defines long term financial planning as plans that portray a companies financial decisions over the span of two to ten years. Long term
financial planning reviews major investments, promoting products, and how companies build value for shareholders (Zutter & Smart, 2019). “Costco is a Victim of it’s Own Success” gave an example of how they planned for long term financial investments.
The article states that Costco has been growing their earnings by an average of eight percent over the past five years. This is a perfect example of how Costco has been planning long term financially (Duggan, 2018).
Companies like Ford, Honda, General Motors, various hospitals, and the postal office want success like Toyota Motor Corporation with their Toyota Production System (TPS) that allows the company to manufacture
products at a low cost with efficiency. The company has also implemented feedback from its employee for innovative ideas and products; employing the employee to solve problems and issues with new ideas. Toyota has
changed the method of its organizational culture and Toyota’s financial performance is one that is frugal by keeping cost low, paying low dividends and investing cash into facilities that manufacture its products. Some financial
quotes from Takeuchi, Osono, and Shimizu (2006) states:
Toyota pays relatively low dividends and hoards cash from 1996 to 2006 dividends averaged only 20% of earnings. At the same time, it accumulated $20 billion of cash, leading some analysts to call it Toyota Bank.
Another oddity at Toyota is the influence the founding Toyoda family wields even though it controls just 2% of the company’s stock. Lastly, Toyota spends huge sums of money on manufacturing facilities, dealer
networks, and human resource department, it has spent $170 million annually. (p.3.4.&5).
The article summarizes that Toyota believes in its resource of people, saving, and spending money on what the company thinks will manufacture innovative products. When the company pays less in dividends and limits control
of stock to the family that created the company they influence the cash flow. As well as spending large amounts of cash on what it needs to continue to earn revenue.
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