The cost leadership strategy
A company that follows the cost leadership strategy is Walmart. Walmart dominates the entire retail industry of the USA using the cost leadership strategy. The ultimate concept of the organization is to attract a large number of consumers, ensuring them low-cost merchandise. The cost leadership strategy has helped the company to gain a competitive advantage in the highly competitive retail market in the USA.
To implement this form of competitive advantage, the firm has currently taken the following strategies:
- The management of the company controls its cost drivers to get the maximum benefit from the supply chain without increasing the price
- The company has planned to meet all its vendors to understand the way to cult down the vendor cost to maintain a win-win relationship with both vendors and consumers
- Instead of adopting a high price strategy, the company has taken low and medium price strategy for its customers in small towns and villages which surround a metropolitan city. It has helped to increase the base of target customers.
The company has eliminated the following benefits