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Some commentators have made a distinction between cost leadership, that is, low cost strategies, and best cost strategies. They claim that a low cost strategy is rarely able to provide a sustainable competitive advantage. In most cases firms end up in price wars. Instead, they claim a best cost strategy is preferred.
Wal-Mart: The High Cost of Low Price is a 2005 documentary film by director Robert Greenwald and Brave New Films about the American multinational corporation and retail conglomerate Walmart. [2] The film presents a negative picture of Walmart's business practices through interviews with former employees, small business owners, and footage of ...
Cost leadership is different from price leadership. A company could be the lowest cost producer yet not offer the lowest-priced products or services. If so, that company would have a higher than average profitability. However, cost leader companies do compete on price and are very effective at such a form of competition, having a low cost ...
A loss leader (also leader) [1] is a pricing strategy where a product is sold at a price below its market cost [2] to stimulate other sales of more profitable goods or services. With this sales promotion / marketing strategy, a "leader" is any popular article, i.e., sold at a low price to attract customers.
Predatory pricing is a commercial pricing strategy which involves the use of large scale undercutting to eliminate competition. This is where an industry dominant firm with sizable market power will deliberately reduce the prices of a product or service to loss-making levels to attract all consumers and create a monopoly. [1]
A supply is a good or service that producers are willing to provide. The law of supply determines the quantity of supply at a given price. [5]The law of supply and demand states that, for a given product, if the quantity demanded exceeds the quantity supplied, then the price increases, which decreases the demand (law of demand) and increases the supply (law of supply)—and vice versa—until ...
For certain products, premium products are priced at a level (compared to "regular" or "economy" products) that is well beyond their marginal cost of production. For example, a coffee chain may price regular coffee at $1, but "premium" coffee at $2.50 (where the respective costs of production may be $0.90 and $1.25).
A price floor is a government- or group-imposed price control or limit on how low a price can be charged for a product, [21] good, commodity, or service. A price floor must be higher than the equilibrium price in order to be effective. The equilibrium price, commonly called the "market price", is the price where economic forces such as supply ...