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A cost leadership strategy aims to exploit scale of production, well-defined scope and other economies (e.g., a good purchasing approach), producing highly standardized products, using advanced technology. [2] In recent years, more and more companies have chosen a strategic mix to achieve market leadership.
[2] [3] Martin Barnes (1968) proposed a project cost model based on cost, time and resources (CTR) in his PhD thesis and in 1969, he designed a course entitled "Time and Cost in Contract Control" in which he drew a triangle with each apex representing cost, time and quality (CTQ). [4] Later, he expanded quality with performance, becoming CTP.
Some practitioners of PCM are mostly concerned with the cost of the product up until the point that the customer takes delivery (e.g. manufacturing costs + logistics costs) or the total cost of acquisition. They seek to launch products that meet profit targets at launch rather than reducing the costs of a product after production.
At the beginning low-cost budget airlines chose "cost focused" strategies but later when the market grew, big airlines started to offer the same low-cost attributes, and so cost focus became cost leadership! [5] A cost leadership strategy may have the disadvantage of lower customer loyalty, as price-sensitive customers will switch once a lower ...
The PBS is identical in format to the work breakdown structure (WBS), but is a separate entity and is used at a different step in the planning process. The PBS precedes the WBS and focuses on cataloguing all the desired outputs (products) needed to achieve the goal of the project.
Cost leadership is a business's ability to produce a product or service that will be at a lower cost than other competitors. If the business is able to produce the same quality product but sell it for less, this gives them a competitive advantage over other businesses. Therefore, this provides a price value to the customers.
In the leadership role, the “important thing is managing your people,” rather than to manage upward. “You can’t have a really great company without strong leadership,” he said.
The services sector treats services as intangible products, service as a customer experience and service as a package of facilitating goods and services. Significant aspects of service as a product are a basis for guiding decisions made by service operations managers. [4]