cotsco case
COSTCO CASE ANALYSIS.
1. What is Costco’s business model? Is the company’s business model appealing? Why or why not?
Costco’s business model is focused on producing high sales volumes and rapid inventory turnover by offering members low prices on a limited selection of national name brands and select private-label products in a wide range variety. Costco is focused in low-cost strategy is concentrated on a narrow buy segment and out competing rivals by having lower costs, therefore being able serve a niche consumers at a lower price. (Gamble, John and Thompson, Arthur (2009).
Costco’s business model is appealing because they are able to continually sell to a niche market. This niche market has annual income which ranges from $75,000 to $100,000 or more a year. By offering the best products possible at lower price, they are able to have these members return. Presently there are 47,679,000 card holders which include Executive members, Business member, Primary cardholders and Add-on cardholders. Whereas Costco has offered the most popular products in order to have a rapid turn-over. Costco has proven that there business strategy has worked by continually producing higher net sale.
2. What are the chief elements of Costco’s strategy? How good is the strategy?
Strategy is the organization’s pre selected that means to achieve its goals or objectives, while keeping in view current and future external conditions. Costco’s strategy’s elements are low prices, limited product lines and selection and treasure hunt shopping environment.
Costco’s is following cost leadership strategy which is good because on this base they can compete with their competitors. By limited product lines and limited selection they are offering limited 4000 items which are less as compared to its competitors. Costco’s is adopted market development strategy by capturing new markets for existing products. Also it provides such product at low prices to its members which they believe will not be
1. What is Costco’s business model? Is the company’s business model appealing? Why or why not?
Costco’s business model is focused on producing high sales volumes and rapid inventory turnover by offering members low prices on a limited selection of national name brands and select private-label products in a wide range variety. Costco is focused in low-cost strategy is concentrated on a narrow buy segment and out competing rivals by having lower costs, therefore being able serve a niche consumers at a lower price. (Gamble, John and Thompson, Arthur (2009).
Costco’s business model is appealing because they are able to continually sell to a niche market. This niche market has annual income which ranges from $75,000 to $100,000 or more a year. By offering the best products possible at lower price, they are able to have these members return. Presently there are 47,679,000 card holders which include Executive members, Business member, Primary cardholders and Add-on cardholders. Whereas Costco has offered the most popular products in order to have a rapid turn-over. Costco has proven that there business strategy has worked by continually producing higher net sale.
2. What are the chief elements of Costco’s strategy? How good is the strategy?
Strategy is the organization’s pre selected that means to achieve its goals or objectives, while keeping in view current and future external conditions. Costco’s strategy’s elements are low prices, limited product lines and selection and treasure hunt shopping environment.
Costco’s is following cost leadership strategy which is good because on this base they can compete with their competitors. By limited product lines and limited selection they are offering limited 4000 items which are less as compared to its competitors. Costco’s is adopted market development strategy by capturing new markets for existing products. Also it provides such product at low prices to its members which they believe will not be