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Costco Diamond Model

Strengths

Costco has attractive low prices for goods and services in the stores and website.

Costco maintains high sales volume even with the low prices of its products.

High sales volume led to the operating efficiency by minimizing the variable costs that are low when the goods Costco sells are high. 

Weaknesses

The company has a membership-only warehouse hence limiting the number of customers. Non-member customers feel unwanted in Costco. 

Costco has a fewer goods and services, leading to consumers visiting Walmart with more goods and services (Gregory, 2017).

Resources

Physical warehouse and website that promote the selling of goods and services. 

Costco has enough supply chain and many suppliers.

Costco cherishes the employees and therefore reduces turnover and maintains highly skilled employees (Gregory, 2017). 

Priorities

Have membership that provides the customers with the best services.

Provides goods and services that are low in prices but have high quality.

Has shareholders that are rewarded for-profits, and Costco ensures the safety of the employees and suppliers.

Their primary responsibility is to serve the community by conserving the environment.

Capabilities 

Costco maximizes freight volume and handles efficient serving of customers by shipping large quantities of goods to warehouses to ensure easy flow of the goods to the customers. 

References

Gregory, L. (2017, March 25). Costco’s mission, business model, strategy & SWOT. Panmore Institute. https://panmore.com/costco-mission-business-model-strategy-swot

 

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By Sandra Arlington

Sandra Arlington is a contributing writer to the Motley Fool. Having written for various online magazines, such as Ehow and LiveStrong, she decided to embark on a travel blog for the past 10 years. She is also a regular contributor to My Essay Writer.

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