Question

Case Chapter 2

1. Imagine you are working for Costco as a manager in its Chicago store. Using Porter’s Five Forces Model, analyze buyer power and supplier power for Costco.

2. Which of the three generic strategies is Costco following?

3. Only members of Costco can purchase products at Costco. Which of Porter’s Five Forces did Costco address through the introduction of its members-only program?

NOTE(I only want number 2 answer)

Answer 1

Which of the three generic strategies is Costco following?

The three generic strategies are broad cost leadership, broad differentiation, and focused strategy. Of the three Costco uses the cost leadership strategy.

Cost leadership is a term used when a company projects itself as the cheapest manufacturer or provider of a particular product or commodity in a competition. It is difficult to deploy the strategy because the management must constantly work on reducing cost at every level to remain competitive