Before beginning this exercise, you will need to read the Costco case. You will also need to review concepts in Chapters 1, 2 and 3 on evaluating a companys direction and strategy. The following questions will be covered in this exercise: What is Costcos business model? Is the companys business model appealing? Why or why not? What are the chief elements of Costcos strategy? How good is the strategy? Do you think Jim Sinegal was an effective CEO? What grades would you give him in leading the process of crafting and executing Costcos strategy? What support can you offer for these grades? How well is Craig Jelinek performing as Sinegals successor? Refer to Figure 2.1 in Chapter 2 in developing your answers. What core values or business principles did Jim Sinegal stress at Costco? In the event you have covered Chapter 3, what is the competition like in the North American wholesale club industry? Which of the five competitive forces is strongest and why? Use the information in Figures 3.23.7 (and the related discussions in Chapter 3) to do a complete five-forces analysis of competition in the North American wholesale club industry. How well is Costco performing from a financial perspective? Do some number-crunching using the data in case Exhibit 1 to support your answer. Use the financial ratios presented on pp. 231-232 of the text to help you diagnose Costcos financial performance. Based on the data in case Exhibits 1 and 4, is Costcos financial performance superior to that of Sams Club and BJs Wholesale? How well is Costco performing from a strategic perspective? Does Costco enjoy a competitive advantage over Sams Club? Over BJs Wholesale? If so, what is the nature of its competitive advantage? Does Costco have a winning strategy? Why or why not? Are Costcos prices too low? Why or why not? What do you think of Costcos compensation practices? Does it surprise you that Costco employees apparently are rather well-compensated? What recommendations would you make to Costco top management regarding how best to sustain the companys growth and improve its financial performance?

7. Based on the data in case Exhibits 1, 5, and 6, is... Based on the data in case Exhibits 1, 5, and 6, is Costco's financial performance superior to that of Sam's Club and BJ's Wholesale? Select the best response(s) from the options provided. Check All That Apply Costco had the fastest rate of growth in sales revenues, operating income, and net income, and the highest sales per store location. Costco has had higher operating profit margins in comparison to Sam's and BJ's. When comparing Sam's to Costco, it is evident that Costco had a more noticeable growth not just in sales but also number of total members and number of new locations from 2014 to 2015. Costco's operating profit margin is slightly higher than that of BJ's primarily due to Costco's lowest possible price strategy, 7. Based on the data in case Exhibits 1, 5, and 6, is... Based on the data in case Exhibits 1, 5, and 6, is Costco's financial performance superior to that of Sam's Club and BJ's Wholesale? Select the best response(s) from the options provided. Check All That Apply Costco had the fastest rate of growth in sales revenues, operating income, and net income, and the highest sales per store location. Costco has had higher operating profit margins in comparison to Sam's and BJ's. When comparing Sam's to Costco, it is evident that Costco had a more noticeable growth not just in sales but also number of total members and number of new locations from 2014 to 2015. Costco's operating profit margin is slightly higher than that of BJ's primarily due to Costco's lowest possible price strategy