cost leadership

Definition

Strategy used by businesses to create a low cost of operation within their niche. The use of this strategy is primarily to gain an advantage over competitors by reducing operation costs below that of others in the same industry.

Use cost leadership in a sentence

  • The cost leadership strategy was paying off greatly for us and we decided to keep it going for a little while longer.

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  • The cost leadership was, in part, able to to be exercised because of the large working capital of the firm.

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  • One of the most effective examples of cost leadership despite being illegal, was crime boss Frank Lucas, in the 1960's Lucas effectively drove down the price of narcotics by purchasing them directly from his manufacture, thereby decreasing the cost of narcotics and giving him a advantage over competitors causing him to thrive in his market place.

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