Low Cost Strategy Flashcards, test questions and answers

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What is Low Cost Strategy?

Low cost strategies are a popular business strategy used by many organizations in order to increase sales, improve profits, and gain market share. Low cost strategies involve identifying areas where costs can be reduced without sacrificing quality or customer satisfaction. Companies typically use low cost strategies to make their products more attractive to customers and remain competitive in the marketplace.The most common form of low cost strategies is price slashing, which involves lowering prices on goods or services in order to attract new customers and maintain existing ones. Price slashing can be done through discounts, special offers, or other incentives that persuade customers to purchase the product at a lower rate than usual. An example of this could be offering free shipping for a certain amount of purchases or providing discounts on bulk orders. This type of strategy has proven successful when implemented correctly as it entices customers with reduced prices while also allowing companies to increase their profits due to the increased sales volume.Another way companies employ low cost strategies is by focusing on efficiency rather than quantity. By streamlining processes and cutting down on unnecessary expenses such as energy consumption, labor costs, taxes and other overhead costs businesses can save money without sacrificing quality or customer service levels. Additionally, businesses can focus on increasing their productivity by investing in technology that allows them to automate certain tasks and reduce manual labor costs while still producing high-quality products or services for their customers at an affordable price point. Finally, another form of low-cost strategy is outsourcing production processes or specific tasks such as marketing campaigns that would otherwise require high levels of manpower within the company itself. By outsourcing these tasks companies are able to utilize external expertise while reducing internal operational costs simultaneously – allowing them to maintain competitive pricing models while still providing quality service levels and meeting customer expectations effectively.