Cost Leadership

Business success built on cost leadership requires the business to be able to provide its product or service at a cost below what its competitors can achieve. And it must be a sustainable cost advantage. Through the skills and resources a business must be able to accomplish one or more activities in its value chain activities—procuring materials, processing them into products, marketing the products, and distributing the products or support activities—in a more cost-effective manner than that of its competitors or it must be able to reconfigure its value chain so as to achieve a cost advantage.

Strategists examining their business’ value chain for low-cost leadership advantages evaluate the sustainability of those advantages by benchmarking their business against key competitors and by considering the impact of any cost advantage on the forces in their business’ competitive environment. Low-cost activities that are sustainable and that provide one or more of these advantages relative to key industry forces should become the basis for the business’ competitive strategy.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

 

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