Cost Plus History Essay
Cost Plus History
The first Cost Plus opened in 1958, when a San Francisco businessman parlayed his passion for travel into an import business by selling a shipload of hand-woven wicker from a local pier. The furniture sold out within a few days, but the idea lived on. Now Cost Plus World Market’s store at Fisherman’s Wharf in San Francisco is a favorite destination for tourists and locals alike. (Cost Plus World Market) With such a receptive audience eagerly awaiting his return, it only made sense to open a store.
And in 1958 he opened the first store in San Francisco’s famed Fisherman’s Wharf and called it Cost Plus World Market. The store quickly became a destination for those who craved original and handmade items from around the world. Items were sold at cost, plus ten percent – hence the name Cost Plus World Market! (Cost Plus World Market) Since its opening more than four decades ago, the Company’s product categories have expanded to include: furniture, pillows, lamps, floor and window coverings, frames, baskets, garden, collectibles, tabletop and kitchen accessories, along with gourmet foods and wines.
From a dining room table and chairs to the perfect Chardonnay to complement a meal, Cost Plus World Market is a complete value retailing resource which provides simple yet unique solutions for every entertaining and decorating need. (Cost Plus World Market) In 1996, the Company completed an initial public offering and trades on the NASDAQ national market under the symbol Cost Plus World Market. (Cost Plus World Market) As of January 30, 2010, the company operated in 268 stores under the name “World Market”, “Cost Plus World Market”, “Cost Plus Imports”, and “World Market Stores”. Cost Plus World Market)
Cost Plus World Market buyers travel the world visiting remote villages, centuries-old factories and foreign bazaars searching for unique products to offer our customers. They get baskets from Bali, chocolates from Belgium, pottery from Portugal, and wine from around the world. These are just a few of the uncommon treasures that customers will discover on their adventure through our stores. Cost Plus World Market) Cost Plus World Market is a spirited, eclectic and wildly different retailer that turns shopping into an adventure by continually filling aisle after aisle with great finds at great prices from around the world. (Cost Plus World Market)
Although I was not able to find Cost Plus World Market’s mission statement, I found what they call the Company Atmosphere. They want customers to expect an adventurous atmosphere when they enter into any of the store locations. They try to recreate a bazaar type atmosphere for those who want to look for items from different areas from around the globe.
Cost Plus World Market changes their items they carry in the stores frequently, so products are always new and fresh. The stores offer a wide variety of goods that are imported from fifty countries around the globe. (Cost Plus World Market) Cost Plus World Market carries a variety of environmentally friendly items such as the plantation raised wood that many furniture products are made from as well as recycled glass goblets to name a few. Cost Plus World Market stores are located near major malls in thirty different cities. The target market is women from ages 25 to 55 years.
World Market is a private label which most of the items have, with a few other labels. (www. hoovers. com) Cost Plus World Market Organizational Strengths Cost Plus World Market is considered 50 Countries Under One Roof. This is strength for the company for the people who do not ever get to leave and see other countries. They bring unique items from all over the globe that you cannot find in an ordinary retail or department store. Cost Plus World Market offers seasonal items that are unique and they sell them at reasonable prices.
Many of the products that are sold at World Market are hand crafted by the local artisans in the different countries. (Cost Plus World Market)The company sells gourmet foods from different areas of the world not sold in your local stores. The wines that they sell include wine, micro brewed and imported beers, coffee, tea and bottled water. The wine assortment is moderately priced premium wines that are not readily available at a neighborhood wine or grocery store. The staffs are trained and can help with the different wines as to what the consumer is looking for with the budget they are working with.
The company routinely shops a variety of retailers to ensure that its products are competitively priced. (Cost Plus World Market) Company strength for the company is that they are online, and since many people are connected to the internet they can reach many more consumers. Outside of the shopping the company has available on the website its Annual Report, Quarterly Reports, and Currents reports. The website gives information for the investors, merchandisers, etc.
Cost Plus World Market offers different coupons for sales and percent off on the internet as ell. Since they shop the other competition retailers to make sure they have a competitive price you can feel comfortable that you will get the best price out there for unique items. Cost Plus World Market Organizational Weaknesses Cost Plus World Market has significant debt and may incur from this substantial debt added to it in the future. A good portion of the future cash flow for the companies operating activities will likely be dedicated to the payment of interest and the repayment of principal on the indebtedness.
The company lenders have liens on the majority of the company’s assets. With this, the lender has a first priority including the company’s cash and inventory balances. (Cost Plus World Market) Cost Plus World Market can minimize this by making sure that they have the best prices of their competitors, advertise sales, new items, and the seasonal items they get in stock. Another weakness for Cost Plus World Market is that they incur major costs for the transportation of goods from foreign ports to the distribution centers and stores.
They continually negotiate pricing for certain transportation contracts and with the rise in fuel costs vendors are expected to increase their rates, which in turn Cost Plus World Market will not be able to remain competitively priced to the consumers as they will have to compensate for the increase in transportation rates. (Cost Plus World Market) They can try to minimize this by negotiating a contract that holds a set transportation rate for a predetermined price to keep the costs competitive with the competition. Cost Plus World Market Organizational Opportunities
Cost Plus World Market has an International, well established, sourcing network with long standing relationship with many of its vendors. They however do not hold long-term contracts with their suppliers as it is customary for this type of industry. The buyers often work with suppliers to produce unique products exclusive to Cost Plus World Market. The company believes that to keep the competitive prices, although there could be delays in changing suppliers, alternate sources of merchandise are available at comparable prices.
Cost Plus World Market’s products are manufactured abroad in over 50 countries in Europe, North and South America, Asia, Africa, and Australia. (Cost Plus World Market) Another opportunity for the company is the use of technology with having the products available on the company website for those consumers which Cost Plus World Market is not in their local area. The company’s information systems allow all of the stores across to link to the headquarters in Oakland, California.
They are able to keep track of all the stores, sales, inventory, what store the items are sold in, all of which is updated daily. This allows the store managements to keep track of their data and better other in-store administration capabilities. This will help to keep products stocked, decide which items sell better in which area so as to not waste money on items which do not sell in certain areas and sell better in others. This will also better the communication between stores and better control finances. (Cost Plus World Market) Cost Plus World Market Organizational Threats
One of the main threats to Cost Plus World Market is the competition. The company competes against a diverse group of retailers from specialty stores to department stores. The competitions companies are such as Bed Bath & Beyond, Target, Crate & Barrel, Pottery Barn, Michaels Stores, Pier 1 Imports, Trader Joes, and William-Sonome. Cost Plus World Market competes with these types of companies for customers, prices, and assortment of products, brand name, recognition, store locations, and the qualifications of the management. Cost Plus World Market) Another threat for Cost Plus World Market is the occurrence or threat of international conflict or terrorist activities because the products that they sell are purchased in other countries and must be shipped to the United States. They need the items precise and on-time as much as possible to keep the stores stocked with the merchandise to sell. These threats or occurrences can cause critical downfall for the company, impact on the business, personnel and facilities, customers and suppliers and the general economic condition for Cost Plus World Market.
Cost Plus World Market) Summary, Strategic Analysis and Suggestions Cost Plus World Market can maximize on their sourcing network with the vendors and suppliers overseas by when the fuel prices are high and scheduled to be on the rise. They could try for an extended contract with the vendors and suppliers to have a set rate for the shipping of the products to keep costs down to be competitive with competitors. This can keep them ahead of the competition and draw in new customers as well as keep the existing customers.
Cost Plus World Market can continue to keep updating their information systems to keep all of the data accurate for finances, merchandise, suppliers, vendors, each stores information, and keep this all connected to the home office in Oakland, California. This is going to let them know where they stand and be able to better serve the consumers. To neutralize the threat of the competition, Cost Plus World Market can do all they can to keep the costs of the merchandise down below the competition, advertise their products, and keep the products fresh and new to keep drawing in current and new customers.
They can continue to build relationships with the vendors and suppliers overseas to keep the products coming and unique for the consumers. To neutralize the threat of international conflicts or terrorist attacks, Cost Plus World Market can try all they can to keep a good bond with the overseas vendors and suppliers to keep business going and items to be shipped to the distribution centers. Many items are unique and exclusive to World Market regularly supplied by an international network of individual and regional artisans developed over the Company’s 50 years in the import business.
The majority of the store’s furniture is constructed of environmentally friendly, farm raised wood while a number of items are made out of recycled glass and yet countless are constructed of environmentally friendly bamboo. The value, breadth and continual refreshment of products invite customers to come back throughout a lifetime of changing home furnishings and entertaining needs. (Wire) For consumers who want to shop in a store that is considered “50 countries under one roof” they will be more than pleased to step into any of the Cost Plus World Market Stores and find unique items to suit their personal tastes.
Subject: Cost Plus,
University/College: University of California
Type of paper: Thesis/Dissertation Chapter
Date: 7 January 2017
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