What does Cost Leadership aim to achieve in a business strategy?

Cost Leadership is a business strategy that focuses on achieving the lowest operational costs in the industry, allowing a company to offer products or services at lower prices than its competitors. This approach can lead to significant cost efficiencies across various operational areas, such as production, procurement, and supply chain management. By minimizing costs, a business can either maintain a healthy profit margin while being the price leader in the market or increase its market share by attracting price-sensitive customers.

Achieving cost efficiencies enables the business to withstand competitive pressures, react to market changes effectively, and invest in other areas that can enhance its market position, such as marketing or customer service. This strategy doesn't rely on product innovation, entering niche markets, or market expansion as primary objectives; instead, it concentrates on streamlining operations and reducing expenses to gain a competitive advantage.