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Costco supermarket - business model and strategy

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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 Sell very large volumes of merchandise and achieving high inventory turnover. The company implemented this model to Sells private label and branded merchandise, and open to Costco members only. This business model is appealing for most companies and has many benefits. Because no matter what the company, always hope to be able to save money for the company. So a good agreement in advance with supplier payment terms is the best way for company. Costco has such high sales volume and rapid inventory turnover it is able to receive cash from the sale of a large portion of its inventory before it has to pay back its suppliers. Also Costco sell high quality merchandise to customers at the low prices. And another benefit doesn't need to maintain a high level of operating funds, or take interest on loans to pay suppliers. �Costco?????????????????????????????????????????????????????? 2. What are the chief elements of Castro's strategy? ...read more.


Yes, I think Jim Sinegal is an effective CEO. If I give him grade, I will give him A. He has many special ideas. And every idea is good and useful. Jim Sinegal always maintains an important management philosophy is keep members come in and shop by low price. He stress products should cheap as possible as they can. He thinks provide value for their customers is more important than get more money. He thinks they should let their employees get more money and better benefit. They are company's treasure. He hopes Costco can develop in many territories. It is good for members. And he thinks they should stable expansion. All the things tell us that his management is flexible and he is an effective CEO. 4. Are Costco's prices too low? Why or why not? In my opinion, Costco's prices are not too low. One of Costco's key strategies is keep low price to members. And Costco know what members need---low price and popular merchandise Why Costco is a top warehouse club, one of reason is low pricing, it use low cost to purchase large volume of wholesale. ...read more.


So, Costco's pay its employee's too much is not only good for employees, but also an important part of the company's development. It is the Costco's business philosophy and value. A good compensate package can attract and retain talents. The Costco's employee hasn't a skimpier benefits package and benefits package and lower wages, so they turnover rate is low. Costco's offer a good career and given opportunity to their employees, in return, the employees will loyal, work hard and willing to dedicate. It will get better productivity. It's the competitive advantage of the Costco. 6. What recommendations would you make to Jim Senegal regarding the actions that Costco management needs to take to sustain the company's growth and improve financial performance? I think the company should continue to maintain their good status, and to provide more low prices and high quality merchandise to customers. And high reputation satisfied the customers with good quality, competitive price to win customer's trust. Expanding sales coverage, and set up online shopping and branch stores in other countries, which would allow more people to buy Costco merchandise. Let employee make contributions to creating new ideas to improve Costco growth. ?? ?? ?? ?? ...read more.

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