• Costco’s Kirkland Signature brand brought in $58 billion in sales during Costco’s fiscal year ending August 2021 - equaling about a quarter of the business’s total revenue- making Kirkland America’s biggest consumer packaged goods brand in terms of sales. Only Nestlé, Procter & Gamble, PepsiCo and Unilever are larger than Kirkland Signature. Kirkland Signature was launched in 1995 by Costco’s then CEO, Jim Sinegal. According to Sinegal in a speech, “The conventional wisdom said that you had to have a different name for every class of product that you had — à la Sears Roebuck with the Kenmore appliances and the DieHard batteries and the Craftsman tools. We looked at it and we said, you know, we’re in so many countries and we have such a wide array of products, we’ll have a room full of attorneys that are doing nothing but trying to clear these names.” Sinegal felt that it would instead be better to focus the attorneys on clearing only one brand, Kirkland Signature. His vision was that Kirkland Signature would provide quality products at 20% lower prices than the competition.

1. In light of the information above, please explain how Costco leverages Michael Porter’s three generic competitive strategies- differentiation, price leadership and focus- to ensure that Kirkland Signature is successful. (Please explain how Kirkland Signature uses each competitive strategy specifically).