Costco - 1 What is Costco's business model Is the company's...

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1. What is Costco's business model? Is the company's business model appealing? Why or why not? Costco’s business model is to generate high sales volumes and rapid inventory turnover by offering members low prices on a limited selection of nationally branded and selected private label products in a wide range of merchandise. Costco’s business model is built upon customer memberships, who join and renew annually. This directly shows customer loyalty as satisfied customers will renew annually. Costco’s business model is great, all customers want to find good quality bargains and Costco is setup to keep their customers coming back to find them. 2. What are the chief elements of Costco's strategy? How good is the strategy? Costco’s strategy is built on the principle strategy of low prices, limited selection, and a treasure-hunt shopping environment. Costco uses their brand Kirkland, which is designed to be equal or better quality than national brands. Treasure-Hunt merchandising consists of a constantly changing selection of luxury items on the floor enticing shoppers to spend more than they might otherwise by offering irresistible deals. Costco’s buyers purchase these items from wholesalers which enables them to offer discounts to their customers. 3. Do you think Jim Sinegal is an effective CEO? What grades would you give him in leading the process of crafting and executing Costco's strategy?
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What support can you offer for these grades? Refer to figure 2.1 in chapter 2 in developing your answers. I believe that Jim Sinegal is an effective CEO as he leads Costco into strategic courses in preparing for the future. He functions as a producer, director and knowledgeable critic. Sinegal exhibits attention to detail and pricing and leads a very active role in management as CEO. 4. How well is Costco performing from a financial perspective? Do some number-crunching using the data in case exhibit 1 to support your answer. Use the financial ratios presented in "A Guide to Case Analysis" and in table 4.1 of the text to help you diagnose Costco's financial performance. How does the company compare to Sam's Club and BJ's Wholesale?
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This note was uploaded on 10/16/2011 for the course MARKETING 113 taught by Professor ?? during the Spring '10 term at Thomas Edison State.

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Costco - 1 What is Costco's business model Is the company's...

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