We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

Case Study 2 - Research Paper Example

Comments (0)
Summary
1. What is Costco’s business model? Is the company’s business model appealing? Why or why not? Costco is a membership warehouse that is based on efficiency and selling at discounted prices. Specifically Costco has a business model committed to providing brand name and company name products at discounted prices, reducing handling on shipments, rapid inventory turnover, volume purchasing, and having a “treasure hunt” merchandising strategy…
Download full paper
GRAB THE BEST PAPER
Case Study 2
Read TextPreview

Extract of sample
Case Study 2

Download file to see previous pages... This part of the strategy is in keeping with low cost merchandise. Costco also only purchases certain sizes, colors, and fast moving inventory. This part of the design is to avoid keeping inventory that customers will not be interested in buying. In doing this inventory will always be moving out of the door and thus the company will always have a high inventory turnover. Not only is Costco specific in terms of choosing the characteristics of the products but Costco actually keeps a small amount of products on hand in order to avoid an inefficient number of products that are slow-moving or become unable to move. One part of the model that is concerning is that there is a lack of serious competitors in the membership warehouse business. I would be concerned with the possible effect of new competition and the growth of current firms like Sam's Club and BJ's Wholesale. Another concern I would have with Costco is the large holding of the land and warehouses. Certainly this could be thought of as a benefit for the company but with the recent drop in real estate prices the value of the property could fall and thus be less able to sell in the future with 150,000 sq. ft. warehouses on the land. On the other hand the land is purchased on low priced land, not necessarily in high traffic areas which would be a positive if the real estate price dropped, since it would be less likely to drop significantly. This is a a great business model because not only is the company able to sell a high amount of inventory in a short amount of time, but Costco is also able to finance inventory purchases through their vendors, thus avoiding long term debt. This allows them to pass on the discounts to the customer which in turn causes the volume and higher revenue. 2. What are the chief elements of Costco’s strategy? How good is the strategy? Volume Purchasing is one of the main elements of Costco's strategy. By purchasing in large amounts Costco is able to realize discounted prices from vendors. Not only that, due to discount pricing Costco is able to sell all of the merchandise before payment is due. By doing this Costco can realize their profit before paying for merchandise while avoiding the need for financing. The Costco vendors are actually financing the sale of the merchandise which is the advantage of this strategy. Treasure-hunt merchandising which is a Costco phenomenon where Costco purchasing agents search for deals that the Costco members would find desirable and stock the shelves with this product that will sell out quickly. The merchandise is purchased from wholesalers and retailers who are struggling and need to move old inventory. The inventory comes in deeply discounted even though the products are brand name products. By selling this deeply discounted merchandise Costco is able to lure in customers who love brand name products. Not only will customers purchase this merchandise but members will most likely be on the look out for such deals thus increasing the likelihood of a quick sale of the merchandise. Costco's business strategy also calls for less marketing through expensive channels such as television and radio. Instead Costco utilizes direct marketing which is not only less expensive but also very personal. The company opens up a store and directly calls companies, individuals and employee's in big ...Download file to see next pagesRead More
Comments (0)
Click to create a comment
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
Case Study 8-2
Given that premium rates has the tendency to appreciate every year (probably due to inflation), then the amount that they will have to pay for their premiums will rise anyway. In this case, the workers suffered a double loss: shouldering a higher percentage of their insurance premiums, and as well as shouldering the anticipated increase in premiums.
1 Pages(250 words)Research Paper
CASE 2 STUDY DESIGN
According to Newton, Bower, & Williams, 2004, the instances of the subjective evaluations of questions are the standards guiding the case studies and those majoring on unfolding the incidence and the predominance of oral infections. Conversely, questions basing on relationship tend to focuses on determining the relations between given occurrences.
3 Pages(750 words)Research Paper
Case study
How can hospitals overcome challenges in supply chain management? What are the alternative solutions to this question? Health care institutions have great volumes of procurement procedures. Medical institutions survive by the supply of medical supplies in the organizations.
3 Pages(750 words)Research Paper
Change and Culture - Case Study 2
According to Manion, Lorimer, & Leander (1996), the organization resort to change because it wants to give the best without restrictions of its
7 Pages(1750 words)Research Paper
Case study
Human resource management (HRM) today are focused on managing cultural diversity particularly in three perspectives known as: (1) access-and legitimacy; (2) discrimination-and-fairness; and (3) integration-and-learning. In line with this,
6 Pages(1500 words)Research Paper
Case study 7/2-2
As consumers of goods and services get accustomed to certain treatment, it is crucial for manufacturers and suppliers to keep up with these trends. The lack of capability to take care of customer needs leads to loss of customers. Loyalty is crucial in the growth and
1 Pages(250 words)Assignment
Physical Assesment Case Study # 2
As part of the medical activity, her medical history should be assessed to help in establishing the cause of her problem. Lack of a comprehensive examination may lead to flawed diagnosis. A complete medical
4 Pages(1000 words)Research Paper
Case Study
The aim of the J.M. Smucker was to acquire an absolute right to manufacture and sell Uncrustables, which they claimed that they used a unique
2 Pages(500 words)Research Paper
Case study
s and sales and being replaced by a three-tied pricing mechanism, creation of new logo, redesigning stores aimed at a year attainment of 100 mini-stores at each J.C Penney (Gilbertson, Mark & Daniel 127). This never yielded any benefits but followed by immediate loss of 25%
8 Pages(2000 words)Research Paper
Case Study 2 -part 2
Within the sample, 46% were of machine type 3 which had the lowest rating of 155 parts per minute. 24% of the sample was of type 1 which had the highest rating of 700ppm. However, 30% of the sample was of machine type 2 which had
3 Pages(750 words)Essay
Let us find you another Research Paper on topic Case Study 2 for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us