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Essay Available:
Pages:
3 pages/≈825 words
Sources:
3 Sources
Style:
APA
Subject:
Management
Type:
Case Study
Language:
English (U.S.)
Document:
MS Word
Date:
Total cost:
$ 12.96
Topic:

Costco Wholesale Corporation

Case Study Instructions:

Costco Wholesale in 2016: Mission, Business Model, and Strategy (C-26)
Use the questions below to help you develop your case analysis for Cotsco. Please remember to follow the format in Appendix I of the course outline to structure your paper.
1. What are the chief components of Costco’s business model?
2. What are the chief elements of Costco’s strategy?
3. Draw a representative five-forces diagram for the North American wholesale club industry.
4. What is your assessment of the strength of competitive pressures stemming from rivalry among Costco, Sam’s Club, and BJ’s Wholesale?
5. What is your assessment of the strength of competitive pressures stemming from the threat of entry of new competitors into the North American wholesale club market?
6. What is your assessment of the strength of competitive pressures stemming from substitutes for shopping at wholesale clubs?
7. What is your assessment of the strength of competitive pressures stemming from suppliers to the three North America-based wholesale club competitors?
8. What is your assessment of the strength of competitive pressures stemming from the customers/ members of the three North America-based wholesale club competitors?
9. What is the collective strength of the five competitive forces facing the three North America-based wholesale clubs
APPENDIX 1:
Case Study Report’s Format
The format for all case study reports is detailed below.
In the elaboration of each of these sections, the student should include concepts from the chapter covered in the course.
Introduction Brief history of the company
Information about the industry - including Five Forces, PESTEL, Benchmarking, Strategic Group Map, driving forces of industry change, etc.
Company mission (stated or implied) Company objectives and goals (stated and implied) Company strategies [should link to company objectives or goals] Complete SWOT analysis (include support) Analysis of financial data for two to three years (Include analysis of the income statement, balance sheet using appropriate financial ratios.
Financials for some companies can be found in the company’s annual reports or from sources like Yahoo Finance, etc. )
Main Body of the Paper Statement of Problems and Purpose of analysis (Specify the salient problem, and explain why selected.)
Identification of strategic alternatives available (a minimum of three mutually exclusive alternatives: explain logic and feasibility, and give advantages, disadvantages at the corporate, and SBU level).
Recommended strategic alternative Implementation plan (activity plan) recommended for the company (including challenges and issues).
Evaluation and control plan [optional] Conclusion Short Summary Reference section Support materials for the Company. (Research documentation)

Case Study Sample Content Preview:
Name: Instructor: Institution: Date: Case study: Costco Wholesale Corporation Established in 1983 by Brotman and Sinegal, Costco is the biggest membership warehouse chain globally. The brand’s reputation is based on its exceptional business strategies that align with customer service and low prices. To date, the company operates 557 warehouse stores worldwide with 406 located in the U.S and the rest in Mexico, Japan, United Kingdom, and Canada. Using the relevant business tools, this paper aims at describing Costco’s business environment and offer appropriate recommendations. The wholesale industry in the U.S is very competitive since it has gigantic firms such as Amazon and Sam’s Club. Consequently, with regards to Porter’s five forces, Costco experiences strong competition because of the presence of these firms. Additionally, buyers have a strong bargaining power against Costco since they can easily switch to other firms. The low switching cost also leads to a strong threat of substitution since the competitors offer a variety of products. However, suppliers have weak bargaining power because there are many suppliers. Therefore, no individual supplier can enforce its demands on the company. The threat of new entrants is low because of high economies of scale that make it tough for new entrants. In terms of SWOT, Costco’s strength lies in its Kirkland brand that accounts up to 20% of its total revenues. Moreover, due to its large market share, Costco does not incur huge advertisement costs since everything it does creates sufficient media buzz. However, the company’s high regional concentration is a major weakness. For instance, California accounts for 30% of the company’s sales (Dalavagas, 2015). Therefore, if California customers move to other firms, Costco would lose huge revenues. Nevertheless, E-commerce only accounts for 3% of Costco revenues. Consequently, the company can use this as an opportunity to increase its revenues. However, the lack of serious E-commerce services is a threat as customers can easily shift to more technologically advanced firms. To navigate through its competitive environment, Costco employs low price and limited selection strategy. This strategy ensures Costco products are better but affordable. In addition, the company has a supply chain management system that minimizes cost. For instance, rather than using many middlemen, Costco moves its products through a network of cross-docking facilities that consolidate inventories in its stores (Dobni, 2016). Due to ...
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