[MUSIC] In our next part of the lesson you'll find out about a Seattle area company called Costco. Costco is a membership warehouse store. You might have heard of it or even shopped there. If you have, you'll know that at Costco stores you can buy products in bulk, often at low prices. There may also be similar stores where you live. In course one of the specialization, you learned some vocabulary to describe companies. This will give you a chance to review what you learned. You'll then hear an interview with a Costco employee, talking about real life experiences of meetings in a US business. Before we listen to the interview, let's find out about Costco. Read the following questions and then read the text to find the answers. What kind of business is Costco involved in? When was the first Costco opened? In how many countries is Costco found? What is Costco's business model? How successful is the company? >> Costco is a familiar name in the US retail industry. You can find Costco stores in and around many major cities in the US, as well as, a number of other countries, but Costco is no ordinary store. When people shop at Costco, they will have a very different experience. A Costco store is a huge warehouse, and to shop at Costco you must be a member and show your membership card before you can enter. We call Costco a membership warehouse club and since it opened its first warehouse in Seattle in 1983, it has become the biggest membership warehouse club in the United States, and the third biggest retailer in the world. Costco has over 650 warehouses in nine different countries, all though the majorities of warehouses are in the US. Costco's headquarters are in Issaquah, just outside of Seattle. Costco has a simple business model, reduce overhead costs and sell quality goods at cheaper prices to consumers. Most Costco warehouses are located just outside the city limits, where real estate prices are cheaper. Costco also saves money by buying in large volumes directly from manufacturers, instead of distributors. By buying in volume, it can get a discount, which it passes on in lower prices to consumers. Products are shipped to the warehouses and directly placed on the floor of the warehouse. Many products at Costco are sold in big sizes, especially everyday household items. Costco does not spend a lot of money on creating displays, making the stores attractive or marketing, again, saving money. Finally, people also have to pay an annual membership fee, so it can sell products at close to break even. Compared to other superstores there are actually fewer products in a Costco warehouse, Costco chooses only certain products to sell at a time. A product may be available one week and gone the next, this again helps reduce the amount Costco has to spend on storage and tracking how much of a product they have left. Costco also has started carrying it's own brand of products, usually significantly cheaper than equivalent name-brand products. Costco has expanded into online shopping, insurance, car sales and travel and the company continues to grow. For financial year 2015, Costco reported total sales of over $100 billion. >> Now listen to a Costco employee talk about meetings. Today we are speaking with Ron Heinstein from the warehouse retail at Costco about business meetings. So, welcome Ron and thank for speaking with us today via Skype. >> You're welcome. >> First, could you describe your job at Costco? >> I'm a General Manager with one of the Costcos. There are 698 Costcos throughout the world and a General Manager is accountable for the entire operation of the entire building. An average Costco will have around 260 employees, 18 to 20 salary managers, and then 20 to 30 hourly supervisors. So a general manager is accountable to protect the company assets, ensure the safety of the employees and the members, and the buck really stops with the warehouse manager. Everything, some if it's good, you get the accolades, if something isn't so good, you hear about it. So the buck stops with the GM. >> And how long have you worked at Costco? I've been there 29 years, 28 of the 29 years I was a general manager at six different locations. >> And about meetings, how many meetings do you have in a typical day or a typical week? >> Well, we have, throughout a typical week, we'll have five to six depending on the needs and the different structure that we're supposed to do, but there's one formal meeting every Monday. And that's where the entire staff meets. And then I have two assistant general managers, and they respectively meet with their areas of accountability throughout the week. So in a typical week, it'll be around five to six. And that encompasses new training that's coming along, changes to the employee agreement, product safety meetings, hazmat meetings. >> And [COUGH] do you ever organize or run a meeting? >> Yes, as the general manager, I'm accountable to organize and run all the meetings. However, the managers that are coming up through the ranks, they're the future of the company, so we want them to participate in the meetings and set them up. We have a formal meeting every week, it's a Powerpoint, every manager has to talk about, their sales, their new items, any people issues, any needs for their particular departments, and they put the slides up and do a presentation. So we want to develop them and teach them. My focus in the meeting is to keep all my managers on course, on task, of what the corporate office expects of us when they have their meeting. >> Okay, and how do you set up a meeting? >> Well, we set it up and the through information that's disseminated from my boss, from the regional bosses, vice presidents, and from our corporate office. Our corporate office meets once a month where our president. Chief executive officer flies in all of his key executives from all over the world, they could do it on a format like a teleconference, but we do it because our president wants to have the synergies of all of the people that run the company in the same room on the same day so they can interact with each other. And then that information that comes out from those meetings is handed down to the different regions throughout the world. So we base a lot of our content in our meetings from what we get from our corporate office. >> And what do you think are the keys to a successful meeting? >> The keys to a successful meeting are to keep the people engaged, and that they feel the passion for the business. The same passion that I have as a general manager, and my assistant GM's, to make the meetings more fun and lightening, and to keep them on track. Usually, a formal meeting on Mondays will be an hour to an hour and a half. So we want to keep the meeting flowing. Keep the people entertained and make sure that after the meeting that they go back to their individual voice and they disseminate the information from the staff meetings and the weekly meetings to their employees. Which, it's critical, because if we don't do that, the meetings will not be effective at all. >> And, do you ever have meetings with international partners, and if so, are there any particular challenges? >> Just internationally, my exposure to the Los Angeles region in Southern California is very minimal. All the managers throughout the world meet formally in Seattle once a year for a conference, so I just get to interact with them there. Internationally that are pertinent to other regions in world are past through us, again, through our corporate office. So my personal involvement as a general manager is pretty minimal with the international. >> Are there any differences with how Costco runs and organizes meetings to other companies that you know? >> Yes, they're very efficient and very hands on, constantly keeps itself very lean, keeps our administrative costs low. Other companies that I have worked for, you get too hung up on too much bureaucracy and you're not really able to function. But Costco keeps things engaging, and very efficient, and very simple, and right to the point >> And if you could change one thing about how a meeting is run, what would it be? >> Well, keeping it simple and keeping our core values intact and maintaining our culture, I think is the biggest challenge for any company, no matter how big or small they are. And so I don't really see the need for any changes other than to keep the focus on keeping our core values, and what our culture is, and pass that on to the new younger managers that are coming up. Because they are the future of the company, but to keep things again simple and very streamlined, pretty efficient as we do. So we can keep reducing prices. That's what Costco is all about is keeping things simple and streamlined. >> So am I right, you like meetings? >> I like meetings, if we keep them to task and keep the people, again, feel a passion for the business, keep the employees engaged as to what's going on. And again, when I mentioned earlier during quarterly, that managers and the supervisors pass on that information, because if we don't do that then meetings are really a waste of time. >> Well thank you, Ron. You've answered some great questions. And thank you very much for joining us. >> You're welcome. [MUSIC]
