Competitive strategy predication on low-cost leadership

Question

When is a competitive strategy predicated on low-cost leadership?

Answer 1

A competitive strategy predicated on low-cost leadership is particularly strong when:

1. Price competition among rival sellers is especially energetic.
2. The products of rival sellers are fundamentally identical and suppliers are readily available from any of several keen sellers.
3. There are a few ways to get product differentiation that have value to purchasers.
4. Most purchasers use the product in the similar ways.
5. Buyers incur low costs in switching their purchases from one vendor to another.
6. Buyers are large and have important control to bargain down prices.
7. Industry newcomers use preliminary low prices to attract purchasers and build a consumer base.