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Cost Leadership Strategy is a strategy which is used by businessmen in businesses to take an advantage over the other competitors by reducing the cost of the operation below the costs of all the other businessmen in the industry. Cost Leadership Strategy is used to create a low cost of operation within their position. The concept of Cost Leadership Strategy was developed by Michael Porter for its utilization in business. It is a way to describe the establishment of competitive advantage. Cost Leadership is often driven by company’s size, scale, efficiency, scope, and the cumulative experience or learning curve. Cost Leadership Strategy Assignment Help gives us the knowledge that this business strategy affects the above mentioned points like exploiting the scale of production, producing highly standardized products, well – defined scopes and other economies by using advanced technologies. Cost Leadership Strategy along with superior customer service and product leadership gives a strategic mix to achieve market leadership. Cost Leadership Strategy aims at the reduction in cost of operation, but the price of the products are not reduced i.e. Cost Leadership is different from Price Leadership and the later remains unaffected by the former. The modern business world is very complicated and sophisticated where their consumers are aware of the choices available to them. Students looking for Cost Leadership Strategy can refer Cost Leadership Strategy Assignment Help.
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Defining Problem
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Advantages and Disadvantages of Cost Leadership Strategy
The Cost Leadership Strategy Assignment Help helps us to know the advantages of the Cost Leadership Strategy. They are
• The emphasis of the cost leaders on the efficiency of the company brings them to a position where they can withstand price competition from the rivals.
• The Cost Leadership Strategy protects the firm from the entry of the new participants, thus behaving as a barrier and protecting the firm and also its existing competitors from the new competition.
• In certain settings, the Cost Leadership Strategy attracts the huge market share because many portions of the potential customers are found paying fewer prices for goods and very appealing services.
Along with the advantages, the Cost Leadership Strategy Assignment Help also highlights the disadvantages of the Cost Leadership Strategy. They are
• The major disadvantage of the Cost Leadership Assignment is the need for more sales volume in many settings which requires significant investments in the production or distribution capacity.
• Another major disadvantage is the reduction of the marketing research, advertisement, research and development in order to keep their cost low. However, this approach may prove expensive in long run.
• Downplaying research and development can slow down the ability of the cost leader to respond to the changes once they are detected.
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• Leadership traits to be acknowledged.
• Better Strategies to enhance its performance.
• Notes on the assignment are available.
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