Low cost relative to competitors is the theme of this strategy, although quality, service, and other areas cannot be ignored. To be the low-cost leader may require the following:
- Aggressive construction of efficient-scale plants
- Vigorous pursuit of cost reductions
- Tight cost and overhead control
- Avoidance of marginal customer accounts
- Cost minimization in areas like salaries, R & D, and advertising
- A high relative market share or other advantages, such as favorable access to raw materials
- Designing products for ease in manufacturing
- Maintaining a wide line of related products to spread costs
- Serving all major customer groups in order to build volume
- Heavy up-front capital investment in state-of-the-art equipment
- Aggressive pricing
- Startup losses to build market share