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Do price policies negate cost leadership strategy?

Asked 2 years ago

Hi I am the owner of an online kitchen gadget store. As there is such a high level of competition I have introduced a cost leadership strategy to outprice more bespoke brands. Occasionally though I will see that a competitor has a price policy that means they will match the price of any store with a lower price than their own. Will this reduce the effectiveness of my strategy? Thanks in advance.

Abeeha Qasmi

Wednesday, January 18, 2023

Price policies can negate a cost leadership strategy but not if you implement it correctly. You can be the low-cost producer in your domain while keeping up with the price policies through various means, such as offering discounts, sales, and promotions. Doing so will allow you to remain competitive in the market without lowering the prices to the point where they start eating up your profits.





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