Final answer:
Walmart practices 'Wal-Martization' with lower pay and few benefits, while Costco offers higher average pay of $20 per hour and significant health benefits to 90% of its staff, unlike Sam's Club and Best Buy. Costco's employee-focused approach may contribute to lower turnover and better customer service, which in turn factors into its competitive advantage.
Step-by-step explanation:
Walmart and Costco approach their business models differently. Walmart is often associated with Wal-Martization, the practice of paying lower wages and providing fewer benefits, impacting local economies and employee well-being. In contrast, Costco has taken a different approach that emphasizes better compensation and benefits for their employees. Costco is well-regarded for paying employees an average of $20 per hour and providing health insurance to nearly 90% of its workforce, which is a stark contrast compared to Walmart and other retailers.
Sam's Club, owned by Walmart, operates in a similar fashion to Walmart, which often means lower pay compared to Costco. However, Costco's higher pay and benefits potentially contribute to a more dedicated workforce, reducing turnover and improving customer service, which could be factors in its success compared to other retailers like Best Buy and the now-defunct Circuit City. High-salary companies do not necessarily face increased bankruptcy risk due to unionization; rather, it depends on how well the business balances its compensation policies with operational efficiency and profitability.