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Cost Leadership Strategy
A strategy where a company aims to become the lowest-cost producer in its industry, often leading to competitive pricing advantages.
Implications
A plan to achieve and sustain a cost leadership position in the market, involving initiatives to reduce costs, increase efficiency, and optimize resource use, critical for competing in price-sensitive markets.
Example
Example: A budget airline adopts a cost leadership strategy by offering no-frills services, optimizing fuel efficiency, and maintaining a lean organizational structure to minimize costs.
Related Terms
Different from a differentiation strategy, which focuses on creating unique value, a cost leadership strategy emphasizes operational efficiency and low-cost production.
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