Low Cost Strategy

Published by MBA Skool Team, Last Updated: January 22, 2018

What is Low Cost Strategy?

Low cost strategy is a type of pricing strategy in which the firm offers the products at low price. This strategy helps to stimulate the demand & gain higher market share.


The firm can gain cost advantages by increasing their efficiency, taking advantage of economies of scale, or by getting the raw material at low cost.


For a firm to be cost leader the following internal strengths are required:

• Access to capital to make significant investments.

• Efficiency in Production system

• Expertise to improve the manufacturing process


The low cost strategy also comes up with the risk that other firms may also reduce their prices & a price may start.

 


This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

Browse the definition and meaning of more similar terms. The Management Dictionary covers over 2000 business concepts from 6 categories.

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