Definition of Cost Leadership Strategy

In the market, businesses have one thing in common i.e. the price competitiveness. By adopting this strategy, they not only focus on winning a large pool of potential customers but they also want to increase their capacity to earn more profit on their products. Cost leadership strategy focuses on price and helps businesses to out beat their competitors with low prices.


To accomplish these goals, there are few things on the business ends to do:

  • Improve operational processes to reduce the cost
  • Tag your product with the industry average prices
  • Beat your competitors with the lowest price


Ofcourse, low pricing is achieved by reducing the operational cost of the process while maintaining the highest product quality to improve the profit margins with the broader customer base.

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