3. Win Through Lower Prices
3. Win Through Lower Prices
A low price strategy has worked for a number of companies, including the world's largest furniture retailer, IKEA; the world's largest general merchandise retailer, Wal-Mart; and one of America's most profitable airlines, Southwest. Yet low-price leaders must be careful. A lower-price firm might suddenly enter the market. Sears practiced low prices for years, until Wal-Mart beat it on prices. Low price alone is not enough to build a viable business enterprise. The Yugo automobile was low in price; it was also lowest in quality and disappeared. A measure of quality and service must also be present, so that customers feel they are buying on value, not price alone
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A low price strategy has worked for a number of companies, including the world's largest furniture retailer, IKEA; the world's largest general merchandise retailer, Wal-Mart; and one of America's most profitable airlines, Southwest. Yet low-price leaders must be careful. A lower-price firm might suddenly enter the market. Sears practiced low prices for years, until Wal-Mart beat it on prices. Low price alone is not enough to build a viable business enterprise. The Yugo automobile was low in price; it was also lowest in quality and disappeared. A measure of quality and service must also be present, so that customers feel they are buying on value, not price alone
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