This article covers meaning & overview of Cost Leadership from marketing perspective.
Cost leadership is a business strategy wherein a business firm tries to become the market leader by operating at the lowest cost amongst all the firms in business. This strategy was developed by Michael Porter as one of the strategies for gaining competitive advantage in the market.
Cost leadership strategy requires a firm to lower its operational cost to such levels that no other firm can match. This would help the firm to either increase its market share by supplying products at the lowest price to customers or increasing its profitability.
There may be three ways of becoming the cost leader:-
Cost leadership strategy has made firms like Walmart an undisputed leader of the market.
The only problem that might accrue with cost leadership strategy is that customers might start associating low cost with low quality.
Hence, this concludes the definition of Cost Leadership along with its overview.
This article has been researched & authored by the Business Concepts Team which comprises of MBA students, management professionals, and industry experts. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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