Strategy and Low Cost- Leadership
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1. What are some disadvantages of low-cost leadership? Is it possible to have a differentiation orientation and a low-cost orientation at the same time? Why or why not?
2. Can you think of any organizations within an industry that compete with a low cost leadership strategy? How are they able to be competitive? Are they growing and/or sustaining business? Explain.
3. Southwest Airlines during 9-11, was able to sustain itself very well, unlike some of the other airlines. Can you think of some of the reasons why other did not fair out so well? What did Southwest do that was different from the other airlines that made them a stand out?
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The expert examines strategies and low-cost leadership.
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1. What are some disadvantages of low-cost leadership? Is it possible to have a differentiation orientation and a low-cost orientation at the same time? Why or why not?
The disadvantages entail losing credibility among consumers if they're able to discredit "your" lowest price advertisements by finding comparable prices that are lower on the internet. In addition, striving to always provide the lowest prices will leave the company susceptible to not having enough profit margin to offer promotional discounts because consumers will believe that your "regular prices" aren't the lowest prices. In addition, the company could become insolvent if competitors have the same model and are more effective as the company could be forced to sell products at a loss. Finally, the product could be considered as inferior because of ...
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