A Common Cost Leadership Strategy Error
Joao Viggiani, Consultant, Brazil, Member
Undeveloped countries often fall into a trap: entrepreneurs confuse low cost strategies with slave-like labor conditions
- absurdly low wages and stressing working conditions - to allow for the practice of low prices. This is really wrong.
Low cost is obtained by a highly productive work force and installations, highly efficient processes and large production and sales scales. These conditions are seldom found in companies in low developed countries such as Brazil, India and specially African countries.
These misleading ideas end up in poverty, not in the creation of wealth, which is the utmost objective of effective managers.