Cost leadership is a strategy in which a company lays more emphasis on process innovations leading to cost reduction. The company will not spend resources to come out with new products with new features but wait and watch in the market to evaluate the features which are demanded by a large section of the market based on the new product introductions by various innovative companies and then acquire the rights to incorporate those in features in its products. Its process capabilities allow it to produce the market accepted features at lower costs than competitors and thereby allow it to sell at lower prices and acquire good market share.
In the airline industry Ryanair is a successful cost leader.
Case: Successful Cost Leadership of Ryanair
http://www.sbaer.uca.edu/research/allied/2005vegas/case/05.pdf
Ryanair
http://www.leadershipreview.org/2011spring/article5_spring_2011.asp
No comments:
Post a Comment