Ch5 Note - Cost-leadership Strategy Do everything to...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Cost-leadership Strategy Do everything to achieve a CA through producing products or services at a lower unit cost (lowering cost structure) charge a lower price. Increase efficiency and lower costs – the manufacturing and materials management functions are the center of attention A low-level of product differentiation – it means that you do not want to be the industry leader in differentiation. Target the average customer – Scale and Focus, not Product Variety - ignores the different market segments – focuses on mass market.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Advantages and Disadvantages of Cost-leadership Strategy Advantages - charge a lower price yet make the same level of profit. - win in the price war. - low-cost as an entry barrier. - protected from rivals. - less affected by powerful buyers and suppliers. - room to reduce its price to compete with substitute products. Disadvantages - technological advancement makes the low cost advantage outdated.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 11/16/2011 for the course ECON 101 taught by Professor Peter during the Spring '11 term at FH Wiener Neustadt.

Page1 / 6

Ch5 Note - Cost-leadership Strategy Do everything to...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online