2. In your own words, discuss the following questions: » Providing the \"lowest

Question

2. In your own words, discuss the following questions: » Providing the "lowest possible price" is written in the Costco mission statement. However, "rewarding our shareholders" is part of the value statement. Does Costco owe it to their shareholders to raise their prescription drug prices to maximize profit and reward shareholders with the best return OR do they owe their shoppers the lowest possible price? Why do you feel this way? Aim for 1 full paragraph (5pts) o If you were an executive at a public company, where is the line between social responsibility and shareholder return drawn? Aim for at least 3 sentences. (5pts)

Explanation / Answer

Ans: There are various strategies that Costco can do, like:

a). By current staregy to provide low cost medicines to customer it can achieve dual objectives of providing medicines at lowest possible price to customers and maximizing shareholders profit.

b). The company's sales would increase many folds and it would increase the profit as well which would serve shareholders.

c). The company should also provide best possible service to customers and try to increase the customer's loyalty.

The balance between social responsibility and shareholder return can be maintained in following ways:-

a). The company can donate certain percentage of profit towards social responsibilty.

b). It can also start to draw raw materials from suplliers which provide jobs to socially deprived people.

c). Share holder return can be maximized by increasing production and sales and finally profitablity of the company.

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