Domains of Differentiation: Low Price

September 15, 2008 – 4:30 am | by admin Low price does not differentiate a company’s products, but it does offer a differentiating strategy that, when most successful, will drive less-efficient rivals from the market. Low-price leaders like Wal-Mart and Charles Schwab strive to provide goods and services at a lower price than their rivals and to sustain their low-price position by selling to mass markets, maximizing operational efficiency, and managing their logistics and supply chains rigorously. As Michael Porter notes in his book, Competitive Strategy, “Cost leadership requires aggressive construction of efficient-scale facilities, vigorous pursuit of cost reductions from experience, tight cost and overhead control, avoidance of marginal customer accounts, and cost minimization in areas like R&D, service, sales force,... [read full story]