Strategic Management - Case Study 1

BUS - 421- Strategic Management

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Created by- Kawshu Hussey

Case Study 1 - Date Created – July 15, 2015

Costco is known for the membership warehouse concept was pioneered by discount merchandising in the USA as well as internationally. Company was dedicated to bringing our members the best possible prices on quality brand-name merchandise. With hundreds of locations worldwide, Costco provides a wide selection of merchandise, plus the convenience of specialty departments and exclusive member services, all designed to make your shopping experience a pleasurable one. The company, formerly known as Costco Companies, Inc., was founded in 1976 by Jim Sinegal, cofounder and CEO of Costco Wholesale.  Costco is one of the largest retail stores in the wholesale industry.

As of December 2010, the Company operated a chain of 582 warehouses in 40 states and Puerto Rico (425 locations), nine Canadian provinces (80 locations), the United Kingdom (22 locations), Korea (seven locations), Taiwan (six locations, through a 55%-owned subsidiary), Japan (nine locations) and Australia (one location), as well as 32 warehouses in Mexico through a 50%-owned joint venture.

Costco’s Strategy does reflect the company’s Mission very well in a promised manner. The foundations of Costco’s strategy were low prices, limited selection, and a treasure-hunt shopping environment. There are numerous reasons why it is important for company to have business strategy are follows as to improve its financial performance, strengthen its competitive position, gain a sustainable competitive and advantage over its market rivals.

Costco’s mission statement is main concept of doing business “To continually provide our members with quality goods and services at the lowest possible prices.” Costco mission statement always make sure  Businesses and families rely on Costco to offer them high quality products and services at everyday low prices. Costco does not compromise with mission statement, It will conduct our business with the following Code of Ethics in mind are Obey the law, Take care of our members, Take care of our employees, Respect our suppliers.

A Business Model of Company is very closely related to the concept of strategy is the company’s business model. A company’s business model is management’s blueprint for delivering a valuable product or service to customers in a manner that will generate ample revenues to cover costs and yield an attractive profit. Costco's Business model follows few of important process which includes Rapid Inventory turnover by offering low prices, Operating efficiencies with volume purchasing and self-service warehouse which enabled Costco to operate profitably at significantly lower gross margins than traditional wholesalers, mass merchandisers, supermarkets, and supercenters.