Companies may choose to follow Cost Leadership, which is a better choice for corporations rather than small business.The rationale Small businesses might not be able to produce huge amount of products. Firms that persue Cost leadership have benefits like achieving economies of scale by providing the lowest price and cutting on budget by finding the lowest suppliers.
Other benefits of Cost Leadership strategy are achieving high profitability margins and also winning against the recession. Walmart added 400 billion in revenue through applying this model in 2009.
So what are some of the aspects that cost leadership followers must consider. Here are three powerfull steps
1) Concentrate on your customers and their taste. Dig deep to provide better products while maintaining low cost.
2) Find the lowest suppliers and lock them in. Most low cost airlines are pioneers in applying this strategy.
3) Since your products are easy to copy, add value to your product. Give more consideration to porter value chain. An example is providing a 24 hour online customer care service.this would let your customers recognize your brand immediately.
Other benefits of Cost Leadership strategy are achieving high profitability margins and also winning against the recession. Walmart added 400 billion in revenue through applying this model in 2009.
So what are some of the aspects that cost leadership followers must consider. Here are three powerfull steps
1) Concentrate on your customers and their taste. Dig deep to provide better products while maintaining low cost.
2) Find the lowest suppliers and lock them in. Most low cost airlines are pioneers in applying this strategy.
3) Since your products are easy to copy, add value to your product. Give more consideration to porter value chain. An example is providing a 24 hour online customer care service.this would let your customers recognize your brand immediately.
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