Sam's Club and Costco

Costco 1

Tiffin University

MBA Graduate Program

MGT-622 Section 90

Costco Wholesale in 2008: Mission, Business Model, and Strategy

Mentor Lillian Schumacher

Darrick Beckwith

January 30, 2011

Costco 2

Costco Wholesale in 2008: Quest, Business Model, and Strategy

What struck you as positive and/ or negatives? Were there certain strategic elements that had been particularly useful? Were there virtually any glaring weaknesses that could endanger their success?

There are many benefits that can be drawn from the way that Costco works and handles its organization. Costco's motto is " To continually provide the members with quality goods and services at the lowest possible prices” (Thompson, Strickland, Bet, 2010). They have stuck to the mantra by giving affordable subscriptions to its customers, and affordable charges of it is merchandise. Costco's strategy of low charges and limited product line and selection manufactured Costco good by keeping their very own margins under their competitors; this is a good in that it will draw more customers and even more accounts for the growth and prosperity of the business. Costco's limited product line and selection is usually a positive mainly because unlike it competitors, Costco offers efficiency in its sales process and makes it less difficult for the business enterprise to be maintained. Sinegal explained that " If you have eight customers into buy Advil, how most are not going to nevertheless any mainly because you just have one main size? Could be one or two, we all refer to that as the intelligent decrease of sales” (Thompson, Strickland, Gamble, 2010). Another positive is Costco's approach to treasure-hunt searching. Costco tries to intrigue it is customers by simply creating a perception of urgency with selected products which can be high-end and that the company understands will sell-out quickly. Although these items a lot of times are higher priced, they even now are fairly lower than the average department store or perhaps its membership warehouse opponents. The only negative would be...

Recommendations: Thomson, Jr., A., Strickland III, A., Gamble, T. (2010). Making and Carrying out Strategy. The Quest for Competitive Advantage. 32-50.

Bowmer, 3rd there’s r. (2007, September 17). How Costco Became the Anti-Wal-Mart. The New York Times [Online]. pp. 1-7. Offered: http://www.nytimes.com/business/yourmoney/17costco.html [17 Come july 1st 2007].

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