Page 73 - GLOBAL STRATEGIC MARKETING

• The low-cost leadership strategy: Firms can also pursue a low-cost
leadership strategy that exploits economies of scale to have the

lowest cost structure of any competitor in an industry. Companies
contain administrative costs and the costs of their various primary

activities, including marketing, advertising and distribution (for
example, Ryanair uses aggressive cost cutting to be Europe’s leading

low-cost airline). The low-cost leadership position based on efficient
production in large quantities guards against attack by competitors

because of the large start-up costs. One negative aspect of the low-
cost leadership strategy, however, is low customer loyalty, as buyers
will purchase from the low-cost leader if everything else is equal. A