Becoming the Cost Leader Might Be Seductive But Rarely Works
Bernhard Keim, Premium Member
Mobile phone companies have one thing in common: high set-up costs. But once the set-up has been done there is little to no costs involved on the calls.
Even in emerging countries quality leadership might be the better strategy
, especially if everyone else is going for the lowest price. The lowest price takes away the margin and deteriorates the quality one can provide.
Georgia - Caucasus, is a country with low income. The market leader on garages was the one that never compromised on quality. As he was the largest at the end, he could take advantage of better prices from suppliers as well. He ended up being price and cost leader at the same time.