Low-cost competitors are on the offensive in many industries, capital goods from airlines to B2B markets, eating away at the market share traditionally enjoyed by premium companies. Dealing with low-cost competition first requires understanding how radically the business model has changed: fewer companies do it all, but specialize in either product development or delivery or customer relations. While there are good reasons for adopting a more focused business strategy be … Read more »

Low-cost competitors are on the offensive in many industries, capital goods from airlines to B2B markets, eating away at the market share traditionally enjoyed by premium companies. Dealing with low-cost competition first requires understanding how radically the business model has changed: fewer companies do it all, but specialize in either product development or delivery or customer relations. While there may be good reasons for adopting a more focused business strategy be, companies need to understand how the interaction between premium and low-cost rivals is, in fact, drives the threat that needs to be managed cunning. With a variety of real business examples, the author stresses that companies must learn how to take on low-cost competitors in enough segment today, develop hard copy performance leadership products and build deep and lasting relationships with their customers. A dual-pronged strategy – one that is both low-cost competitors challenges in the good-enough segment, but also in the competition as a premium player either performance management or relational value options – can be used to low-cost competition to beat them at their own game.
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Adrian Ryan
Source: IESE Insight Magazine
8 pages.
Release Date: 15, March 2010. Prod #: IIR020-PDF-ENG
The high stakes of low-cost competition HBR case solution

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