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Costco

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Management
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Florida State College at Jacksonville
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Running Head: COSTCO’S BUSINESS MODEL-CASE STUDY 1
COSTCO'S BUSINESS MODEL-CASE STUDY
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COSTCO’S BUSINESS MODEL-CASE STUDY 2
Costco's business model
Costco is an American multinational corporation that operates on a low-cost provider.
The company makes its revenue through a membership offered at a low price. The business
model implemented ensures the company generates high sales volume and rapid inventory
turnover. Additionally, the company is capable of transporting its finished goods from suppliers
to consumers exclusive of the high-interest purchasing contract. The combination of quick
inventory turnovers and high sale volumes makes transportation an easy task. Thus, this strategy
enables Costco Company to rack up products less than 15% in comparison to the industry
average of above 25% (Thompson, 2017).
Similarly, Costco creates a conducive working environment for all its employees. The
company promotes a cooperative culture by offering substantial benefits, a living salary, and
professional opportunities. Consequently, workers tend to provide excellent services to
consumers. The competent services received convince the consumers to pay the membership cost
to gain access to the store. The benefits also motivate the customers they stand to learn from the
company.
Characteristics demonstrated by the model make it appealing to the company. The
company has a good relationship with its consumers due to the quality products sold at a low
price. The business is placed in a position to run profitably at considerably lesser profit margins,
unlike supermarkets and mass merchandisers (Thompson, 2017). Moreover, Costco's business
model is attractive due to the amalgamation of lower prices and rapid turnover. Due to the
combination, the company is competent to trade and obtain money for inventory before
disbursement to the merchandiser sellers is due. Hence, the business model establishes a value

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Running Head: COSTCO’S BUSINESS MODEL-CASE STUDY COSTCO'S BUSINESS MODEL-CASE STUDY By (Name) Course) Professor Institution Date 1 COSTCO’S BUSINESS MODEL-CASE STUDY 2 Costco's business model Costco is an American multinational corporation that operates on a low-cost provider. The company makes its revenue through a membership offered at a low price. The business model implemented ensures the company generates high sales volume and rapid inventory turnover. Additionally, the company is capable of transporting its finished goods from suppliers to consumers exclusive of the high-interest purchasing contract. The combination of quick inventory turnovers and high sale volumes makes transportation an easy task. Thus, this strategy enables Costco Company to rack up products less than 15% in comparison to the industry average of above 25% (Thompson, 2017). Similarly, Costco creates a conducive working environment for all its employees. The company promotes a cooperative culture by offering substantial benefits, a living salary, and professional opportunities. Consequently, workers tend to provide excellent services to consumers. The competent services received convince the consumers to pay the membership cost to gain access to the store. The benefits also motivate the customers they stand to learn from the company. Characteristics demonstrated by the model make it appealing to the company. The company has a good relationship with its consumers due to the quality pr ...
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