Every business must find a strategy that enables it to achieve a competitive advantage in the marketplace. That choice of strategy is based on the strengths and weaknesses of the company’s products and the position it wants to have in the minds of its customers.
The best strategy is the one that leverages the company’s strengths for the greatest profits and the highest return on investment.
There are four generic business strategy proven to work we will be talking briefly on one today
Cost Leadership Strategy;
To become a cost leader, a company strives to reach the lowest cost of production with the least distribution cost so that it can offer the cheapest price in the market. With the lowest price, the company hopes to attract the most buyers and dominate the market by driving competitors out.
A successful cost leadership strategy requires the optimization of all aspects of a company’s operations.
shoprite is one of the most well-known companies that has an effective cost leadership strategy. Their approach is to market to the largest number of customers with the lowest prices on all of its products.
The company has been able to dominate the low-cost market by negotiating price-volume discounts with suppliers and building an incredibly cost-efficient distribution system. Shoprite works with all of its internal processes to operate at the lowest cost. .