ssignment $($Part A$)$ i

Mission, Business Model, and Strategy

In this case, you'll explore co$-$founder and former CEO Jim Sinegal's style of managing, his values and business principles, the company's clever and innovative business model, the chief elements of its business strategy, and the company's financial performance.

Before completing these exercises, be sure to read the Costco case.

What is Costco's business model? Is the company's business model appealing? Why or why not?

Select "yes" for those statements below that are accurate and choose $"$no$"$ for those that are not.

Costco requires the payment of membership fees to shop at its warehouse.

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Costco's business model focuses on high sales volumes and rapid inventory turnover by offering members very low prices on a limited selection of nationally branded and selected private$-$label products in a wide range of merchandise categories.

The broad appeal of the company's low prices create average levels of store traffic and produce average sales volumes on many items.

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Costco operates profitably at significantly lower gross margins than traditional wholesalers, mass merchandisers, supermarkets, and supercenters.

Costco's high sales volume and rapid inventory turnover generally allow it to sell and receive cash for inventory before it has to pay many of its merchandise vendors, even when vendor payments were made in time to take advantage of early payment discounts.

Costco allows customers to shop free for a month before requiring a membership.

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