The Success Strategy of Costco’s Business

Running head: The Success Strategy of Costco’s Business 1
The Success Strategy of Costco’s Business
(Author’s name)
(Institutional Affiliation)

The Success Strategy of Costco’s Business 2
Costco’s business model main aim is generating high sales volumes and moreover, providing
a fast inventory turnover. The purpose of business is to provide their members with products at a
low cost on a restricted selection of nationality branded and selected private label products in a
wide range. The business model used is one of the best because the business always wants to
keep their customers in check, so as to make customers want to come back for more. The
business is set up to allow customers to renew their membership annually, this enables Costco to
note the loyal members because this will prove the satisfaction of customers (Yang et al., 2017).
Costco’s business has been competitive and successful all these years because the strategy
used is built on principles of low prices, restricted selection, and a very welcoming environment
for customers to go shopping in. Kirkland is the brand used to provide quality and better national
brands to customers. The business offers irresistible deals to customers, enticing them to spend
more than they might, this allows Costco to be competitive therefore maximizing on profits
(Loftsdóttir & Mixa, 2017).
Jim Sinegal was an effective CEO who was pretty firm on his view of the pricing strategy. He
dreamed of creating an organization that would stick around for 50 years not just making quick
money but giving customers best environment to do shopping in. He did hold the store from a
single store to the fourth largest retailer in the world. He had vision and mission because he
Sinegal never wanted any competitor to come in and beat their price. Sinegal was the CEO
behind the crafting of new strategies and implementing and executing the chosen strategy. In my
opinion, Sinegal is an effective CEO and that’s why the text did not record an evaluating
procedure to his strategy. The strategies crafted were low price, limited selection, and a better
environment for shopping. He concentrated on large volumes purchasing, effective and effective
distribution, and self-service warehouses facilities. Existing members do receive direct mail and