Low-Cost Strategy


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 Low-Cost Strategy: It is the ability of a company or a business unit to design, produce and market a comparable product more efficiently than its competitors. It is a competitive strategy based on the firm’s ability to provide products or services at lower cost than its rivals. It is formulated to acquire a substantial cost advantage over other competitors that can be passed on to consumers to gain a large market share. As a result the firm can earn a higher profit margin that result from selling products at current market prices.

Eg: Whirlpool has successfully used a low-cost leadership strategy to build competitive advantage.


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