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Cost leadership

This topic has 1 reply, 2 voices, and was last updated 9 months ago by Ken Garrett.

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May 10, 2022 at 1:14 am #655282
Noah098
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Sir in case of cost leadership, does the company compete with its rivals at the same market price as is in the industry(and aims to maximise profits),
OR does it use its lowest cost advantage to further reduce the price, and focus on maximising sales volume?
May 10, 2022 at 3:15 pm #655336
Ken Garrett
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Strictly, cost leadership allows a company to make good profits at the current market price. In practice low cost producers will probably lower sales prices to put pressure on their less efficient rivals.
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