Best cost provider strategy company example

Low-Cost Provider Strategy Does a low-cost provider strategy make sense?

Best cost provider strategy company example

Although best-cost provider strategies utilize concepts of both a differentiation strategy and a low cost strategy, Redbox had a unique advantage in knowing where to place their kiosks. This is due to the knowledge of their parent company, Coinstar.

Best-cost Strategy and Low Overhead Business Model

Their kiosks are more of a unique quality for reaching its customer base than a niche. Creating kiosks and placing them in locations that already attract many customers has been even more beneficial because of Coinstar.

The idea is to make renting a movie more convenient, instead of traveling to a movie rental store, the kiosks are strategically placed so that customers walk by them in places they frequent more often; such as grocery stores, convenient stores, and fast food restaurants.

Some stores that wanted a Redbox kiosk were denied one because the store was not believed to be in a good position to generate rental sales for Redbox.

The Challenge of Following a Best-Cost Strategy

Redbox was able to offer their customers a low price of one dollar a night per rental. This price was significantly cheaper than rental stores who charged a fixed price for a given number of days. Therefore, if a Redbox customer rented a movie they could hold onto as long as they wanted knowing it was only going to cost them one dollar per night.Is being the lowest cost provider the best strategy for increasing sales and bumping the bottom line?

On the first day of Econ , your professor explained a fundamental economic concept: Lower the price and demand will increase.

Best cost provider strategy company example

Was curious about the competitive pricing strategy for e-commerce stores and saw your low cost provider statement. I just Googled “Sams Club” and looked up a couple items. Even compared to Google Shopping / Amazon results, they still have the lowest price on some high ticket items.

Jun 29,  · Cost leadership is one strategy where a company is the most competitively priced product on the market, meaning it is the cheapest.

Best Cost Strategy

You see examples of cost leadership as a strategic marketing priority in many big corporations such as Walmart, McDonald's and Southwest Airlines. Low-Cost Provider Strategy.

The objective of a company using a low-cost provider strategy is to sell its products at the lowest possible price to attract customers. This is known as a price advantage. Is being the lowest cost provider the best strategy for increasing sales and bumping the bottom line?

On the first day of Econ , your professor explained a fundamental economic concept: Lower the price and demand will increase. A best-cost strategy relies on offering customers better value for money by focusing both on low cost and upscale difference.

The ultimate goal of the best-cost strategy is to keep costs and prices lower than other providers of similar products with .

How to Use the Best Cost Provider Strategy | Bizfluent