1. What strategy formulation tools might top management at Costco use to assess opportunities and threats to the company’s future expansion?
2. Explain how Costco’s select test-market warehouses demonstrate cooperation and connectedness between the different levels of planning and strategy throughout an organization.
3. How does James Sinegal’s recounting of Costco’s history using early warehouse photographs at manager’s meetings illustrate the role of corporate culture in supporting an organization’s strategy and performance?

November 22, 2006, marks a major milestone in the history of Costco Wholesale Corporation. On that date, in the city of La Quinta, California, the world’s top warehouse-club operator opened its 500th location since pioneering the discount warehouse concept in the 1970s and ’80s. Throngs of customers, city planners, and interested observers gathered in the Southern California suburb to celebrate the store’s grand opening, days before the onset of the 2006 holiday shopping season. At 8 a.m., the boxy 148,000 square-foot facility threw open its doors, welcoming hundreds of enthusiastic bargain hunters giddy at the prospect of buying the year’s hottest merchandise at rock-bottom prices. As the morning hours passed, Xbox 360s, Panasonic plasma TVs, and AG brand jeans began beeping briskly through the checkouts—a sure sign that holiday stockings across the Greater Palm Springs area would soon be filled with gift-giving cheer.