The business model of Costco’s is simply to generate high sales volumes and rapid inventory turnover by offering its members low prices on a limited selection of nationally branded and selected private-labeled products in a wide range of merchandise categories. The company’s business model is appealing in today’s market because of the economic downturn we are experiencing. Everyday American’s are looking to make their dollar stretch and Costco’s provide them with a great way to buy in bulk and stretch the consumer dollar to the max!
The chief elements of Costco’s business strategy are strong within its pricing, product selection, and treasure-hunt merchandising. This strategy is key to the success of Costco’s. We can tell by examining a summary of the company’s financial and operating reports that between the years of 2000 through 2006, the net sales and the net revenue of the company was in a steady increase. We have learned that a strategy is only as good as it appeals to its target market. Costco’s have clearly identified who their customers are and designed its strategy to keep those customers coming back for generations.
Jim Sinegal, cofounder and CEO of Costco Wholesale, while his methods may be unorthodox, his business strategy is certainly working. He is not only interested in taking care of his customers but also his employees. With his methods of interacting with his employees, he has proven that a company doesn’t have to be ruthless. But being humane can make employees happy to be employed with a company. When Sinegal walks into one of his stores, he's treated like a celebrity. His employees seem to genuinely like him. And the feeling's mutual. "The employees know that I want to say hello to them, because I like them," he said
Sinegal’s vision for Costco is to continually provide quality goods and services at the lowest possible prices. The company’s business model was to generate high sales volumes and rapid inventory turnover...
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