Costco's Mission Can Be Resumed As the Term Paper

Costco's mission can be resumed as the willingness to offer its members a large variety of good quality products at the lowest possible price

The very philosophy of the company is a clue that the top management practices a low-cost management which allows it to save on several fixed costs, such as office supply etc. For example, the fact that senior executives use furniture purchased from the Boeing Company and used ever since Costco was created is notorious, but there are other examples in this sense: no public relations department, scarce use of the company jet and sparsely decorated warehouses

As we can see, the company's strategy, at least in terms of finance, is to keep costs as low as possible, so as to be able to compete with the other players on the market in terms of overall volume sold. In this sense, the company's strategy is a low price-high volume strategy. The fact that most of the products the company sells are not individually distinct helps in this sense, as it can hold products on stock for an indefinite period of time.

The company has formed, ever since the creation of the company in 1976, and has practiced the type of strategy previously described.This type of strategy has several positive aspects and advantages. First of all, it allows the company to create a very strictly defined clientele, the Costco clientele. One may attempt a description and say that the targeted consumer segment for Costco is the lower middle class, people within the middle ranged income area. Further more, the company has not abandoned its traditional market, the small-business owners.

Second of all, the low price-high volume strategy is often less sensitive to economic crisis than any other strategy. This is mainly due to the fact that during economic crisis, the individual is usually mostly influenced by the level of prices rather than anything else, especially the category targeted….....