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The centerpiece of Costco’s business model was a powerful value proposition that featured a combination of (1) ultra-low prices on a limited selection of nationally branded and Costco’s private-label Kirkland Signature products in a wide range of merchandise categories, (2) very good to excellent product quality, and (3) intriguing product selection that included both everyday items and ongoing special purchases from a big variety of merchandise suppliers that turned shopping at Costco into a money saving treasure hunt.”
What is Costco's business model? Is it appealing?
Two primary competitors (not including Costco): Sam's Club, BJ's Wholesale Club. Others such as Amazon, Walmart, etc.
Who are the competitors of North America's wholesale industry?
He dressed casually and unpretentiously. Personally toured Costco stores. Everyone was on a first name basis. etc.
What are some of Jim Sinegal's qualities as a CEO? How effective would you say he was as a CEO?
Low labor costs, low prices, better presentation, pays workers more, and has membership fees.
Why is Costco the "king" according to Jim Cramer?
What recommendations would you make to Costco top management regarding how best to sustain the
company’s growth and improve its financial performance?
Pricing: Low prices with low membership cost to create revenue.
Product selection: 25% Kirkland, 75% brand name
Treasure Hunt Merchandising: occasional specialty items offered at discount prices.
Growth Strategy: Increase store sales by 5% annually.
What are the chief elements of Costco’s strategy? How good is the strategy?
Price, merchandise quality and selection, location, and member service.
What are the factors of competition in North America's wholesale industry?
"The company will continue to pursue its mission of bringing the highest quality goods and services to market at the lowest possible prices while providing excel-lent customer service and adhering to a strict code of ethics that includes taking care of our employees and members, respecting our suppliers, rewarding our share-holders, and seeking to be responsible corporate citizens and environmental stewards in our operations around the world."
What core values or business principles did Jim Sinegal stress at Costco?
Ended partnership with American Express and created a new partnership with Citi and Visa.
What is the deal that is discussed in the video "Costco Strikes a New Deal?"
You can look at deals as a nonmember, but you have to register in order to book a trip. Prices are 15-20% cheaper than travel websites. Includes hotel rooms, rental cars, tickets, etc.
Explain how Costco's travel benefits work? (Does Costco Beat Out the Competition When it Comes to Travel?)
Is Costco’s expansion outside the U.S. is financially successful?
Why or why not?
Yes, Costco has 64% of a $457 billion industry. Sam's 29% and BJ's + others is 7%.
Is Costco’s financial performance superior to that at Sam’s Club and BJ’s Wholesale?
He upheld the company's values and further stressed values such as environmental sustainability and ethical product sourcing.
How well is Craig Jelinek (CEO) performing as Sinegal’s successor?
Costco sells products online for a higher cost than in store. Also, they limit the size of their products so they are easier to ship. Finally, they don't offer all products available in store on their website.
How does Costco make up for the high cost of shipping items in bulk? (Costco Under Pressure to Compete With Amazon Online)
How well is Costco performing from a strategic perspective?
What is the nature of Costco's competitive advantage? What distinguishes them from their competitors?
Threat of Entry - low, many barriers
Supplier Power - low, wholesalers dictate price
Threat of Substitution - not very applicable
Buyer Power - high
Competitive Rivalry - medium/low
What are Porter's Five Forces and how do they apply to competition in the North American wholesale industry?

Costco Jeopardy

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