OVERVIEW AND GENERAL INSTRUCTIONS:

This Case exam is intended to give yo the opportunity to apply many of the concepts covered up to this point in the course. It is absolutely essential that you read the case in its entirety at least one time (two times is better) before you start on the exam. Answer the questions as they are written - of the major reasons students lose points on written exams is because they fail to answer questions completely.

Case Exam Questions:

1. What is your assessment of Costco's business model? (a) Does the company have a compelling Customer Value Proposition? (b) Does the company have a viable Profit Formula? Justify your responses.

2. What are the chief elements of Costco's Strategy?

3. What core values and business principles did Jim Sinegal stress at Costco?

4. What is competition like in the North American wholesale club industry? Which of the five competitive forces is strongest and why? NOTE: Use the information in Figures 3.4, 3.5, 3.6, 3.7, and 3.8 (and related discussion in Chapter 3 and the related Instructor's Note to analyze competition in the industry.

5. Use the VRIN Tests (Chapter 4 and related Instructor's Note) to assess the competitive strength of three (3) different resources or capabilities of the company. Which of them seem to have the potential to support and sustain a competitive advantage?

6. On which of the five generic strategies (Chapter 5 and related Instructor's Note) is Costco's basic competitive approach based?Use facts from the Case to justify and support your answer.

7. Describe three (3) strategic actions Costco employed to complement its basic competitive approach and maximize the power of its basis competitive approach (Chapter 6 and related Instructor's Note)?

8. Insights Gained: Describe at least three (3) ways in which your understanding of business strategy and the strategy management process was enhanced as the result of having completed this exam.