Competing in Tough Times: Business Lessons from L.L.Bean, Trader Joe’s, Costco, and Other World-Class Retailers

Chapter 2. Low-Cost Strategies I: Key Elements of a Low-Cost Provider Strategy

Cost-effective retailers can consistently deliver value on the basis of their low prices. A low-cost advantage is appropriate for effectively matching or coming close to matching low prices at directly competing retailers, as well as indirect competition from superstores, limited assortment stores, warehouse clubs, dollar stores, factory outlets, and web-based retailers. It is also an important part of the strategy to win over and retain cost-conscious consumers during a major recession, when many customers become especially frugal. An additional benefit of a low-cost strategy is retaining customers who will have remained cost-conscious after the recession has passed. ...