Low cost
Being a company that offers a low price (the price tag to the customer) is rather easy—at least for a short while. You can drop your prices to very low levels anytime you’d like. If you do it to clear out slow-moving merchandise, you might call it a clearance sale. If you try to do this indefinitely, it might be financial suicide. The real trick of a low-cost company, then, is to offer low prices indefinitely, still make a profit, and keep doing it over and over again, day after day. To do this, you must first obtain your own products or services at low cost (the price tag to you).
People frequently think of Wal-Mart or Costco as low-cost companies. And indeed they are—they have enormous purchasing power, which they use to negotiate ...
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