Costco Wholesale Business Strategy Introduction Costco’s big box, high quality, and limited selection philosophy equates to big bucks. Last year, the big box chain took in nearly $70 billion in sales revenue with a net profit of $1.1 billion, with most of the overhead going toward cost of sales (products) according to its 2009 Annual Report. The type of business strategy that Costco implements is based on a business model of “membership fees rather than margins on goods sold” (Wind, 2005, p. 868). Warehouses are positioned near residential neighborhoods with an average household income of $75,000 according to Boyle (2006), a strategy to lure convenient shoppers.Retailers such as Costco and Sam’s Club have played a crucial role among...The end:
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