COST FOCUS Flashcards
What is the cost focus strategy
Cost focus: a strategy of selling a basic product to a niche market (for a low cost)
Example of where the cost focus strategy is used
Examples would be a VW polo, and a Skoda Fabia - The Skoda is the cheaper version of the polo, pretty much the same car, just a lower cost.
What are the requirements for the cost focus strategy being effective
A product that is similar to the market leader, but can be sold at a lower price.
A clear target market.
What are the benefits of using the cost focus strategy
Targeting a niche market - maybe less competition
Allows smaller businesses to compete - Smaller businesses could implement a costs focus strategy which could help them compete with bigger businesses that are benefiting from economies of scale.
