Essay on cotsco case

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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…show more content…
Jim Sinegal wanted to say that these two principal activities reflected in working environment of Costco which makes them profitable throughout the world as compared to other conventional wholesalers and merchandisers. 5. (in the event you have covered Chapter 3) What is competition like in the North America wholesale club industry? Which of the five competitive forces is strongest and why? Use the information in Figures 3.4, 3.5, 3.6, 3.7, and 3.8 (and the related discussions in Chapter 3) to do a complete five-forces analysis of competition in the North American wholesale club industry. The wholesale club industry has evolved into a common oligopoly just as other major industries have. The “big three” of this industry are Costco, Sam’s Club, and BJ’s. A five forces analysis will be examined in regards to the wholesale club industry. Force one, barriers to entry; the three companies are at an advantage because of the difficulty of new firms entering the industry. They accomplish economies of scale and scope due to the size and volume of their sales by buying and selling more goods on a larger scale with lower costs. It would take a considerable amount of time for a new entrant to achieve the benefits of economies of scale. The capital requirements are large due to the construction of buildings and acquisition of land and licenses. Only companies with an
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