cost leadership strategy

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Abstract

Firms that effectively use the cost leadership strategy earn above the normal returns regardless of the existence of strong competitive forces A cost leadership firm generates and maintains a valuable competitive advantage when that strategy is rare and expensive to emulate . The most important focus in successfully implementing a cost leadership strategy is all about cost reduction and efficiency in spite of value-creation Cost leadership firms usually keep the number of corporate staff low have sustained access to capital and capital

investments as well as process engineering skills . In addition , these firms have product designs that are easy to manufacture , taut cost control systems , cost leadership philosophy and rewards for cost reduction as well as incentives based on improved or maintained quality . Despite the competitive advantages of cost leadership strategy , there are some competitive risks that accompany it . Firms that attain the highest possible results from cost leadership strategy primarily focus on a wide market where their cost leadership can create competitive advantage

Table of Contents

TOC \o "1-2 " \u Abstract PAGEREF _Toc1 \h 1

Table of Contents PAGEREF _Toc2 \h 2

1 .0 Introduction PAGEREF _Toc3 \h 4

2 .0 Organizational attributes for cost leadership firms PAGEREF _Toc4 \h 5

3 .0 Strategies for cost leadership firms PAGEREF _Toc5 \h 5

4 .0 Sources of cost advantage PAGEREF _Toc6 \h 5

4 .1 Economies of scale and the learning curve PAGEREF _Toc7 \h 6

4 .2 Disparity in access to low-cost Inputs PAGEREF...