Case study assignment 2

Case study assignment 2 - Case study assignment 2 1....

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Case study assignment 2 1. Costco’s business model is to generate high sales volumes and rapid inventory turnover by offering member’s very low prices on a limited selection of nationally branded and select private- label products in a wide range of merchandise categories. . The company’s business model is very appealing to consumers. A number of examples of this include Costco’s 110,000 carats of diamonds sales, annual gasoline sales of $4.6 billion, and 1 million pumpkin pies sold during Thanksgiving weekend alone, and this was in 2007. . Jena McGregor from BusinessWeek states: “The beauty of Costco's deep-discount, high-volume model is that it works even when the economy is at its worst: The company has held up well during past economic downturns.” This is a very appealing business model that has worked, and is durable. Without James Sinegal and his amazing determination to maintain this mission and business model, Costco would not be the company it is today. 2. Costco’s chief elements of strategy are pricing, product selection, treasure-hunt merchandising, marketing and advertising, growth strategy, and web site sales. The keystone focus is low prices, a limited product line and limited selection, and emphasis on the “treasure hunt” shopping environment, by using all the elements. . The strategy is great reports Peter Alexander of NBC NEWS on his video on Behind-the-scenes at Costco. Customers have found value in the hard work Costco puts into saving them money and time. One customer reported enjoying the shopping process because of the savings she had on things she knew to be overpriced elsewhere. . 3. Yes I think Jim Sinegal is an effective CEO. The grade I would give him in leading the process of crafting and executing Costco’s strategy is an A. I give him an A because when
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he decided to stand firm for 25+ years on the strategic vision he had from the beginning and kept the company afloat doing so I believe there is a great deal of strategy and vision behind it, not luck. Implementing his vision to keep costs low and have brand name items
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Case study assignment 2 - Case study assignment 2 1....

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