How Growth Happens: CostCo Edition

Monday, October 5th, 2009

Bryan Caplan normally ignores self-congratulatory corporate publications, but he makes an exception for Costco:

See economic growth at work: How their product designers identify high-quality competitors, and figure out how to make them a little better and a lot cheaper. (Hint: Packaging, transportation, and shelf space all figure prominently).

See reputation at work: CostCo doesn’t just improve products; it figures out where the competition is cutting corners — and then boldly makes its products with their corners intact.

One of Costco’s goals with its Kirkland-brand products is to achieve pallet efficiencies:

For example, when the jars containing Kirkland Signature cashews were changed from round to square, the number of jars that could fit on a pallet increased from 288 to 432, saving 600 truck-loads per year.

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