A major drawback of using a low-cost provider strategy is industry cost leadership.
Cost leadership is a term which is used when any company projects itself as the cheapest manufacturer or the provider of any product or commodity in competition.
It is very difficult to deploy the strategy because the management keep on working constantly on reducing cost at every level to remain competitive.
A pricing strategy in which a relatively low price to stimulate demand and gain market share is offered by the company is known as low cost strategy.
It is usually used where the product has very few or simply no competitive advantage.
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