A Strategy Of Being A Low Cost Provider Essay examples

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Wal Mart is a primary and perhaps the most obvious company pursuing what can be called a strategy of being a low cost provider. Wal Mart operates in the retail and grocery industries. Wal Mart achieves competitive advantage by leaning on its suppliers, since it does not make many of the products in its retail stores, to provide goods to Wal Mart and its customers at the lowest price point possible. Wal Mart moves into areas, neighborhoods and locales where established competitors are operating and undercuts them, taking advantage of its economies of scale and nationwide and even worldwide distribution, supplier and retail networks.

Cricket Wireless is another company pursuing a low cost provider strategy. Cricket is a nationwide provider of cellular telephone and smartphone data service, and offers quality of service that is average or below average in exchange for prices for said service that are highly competitive with all other national cellular wireless networks. Cricket is cited as having a below par network infrastructure and service that does not stack up to rivals, but it retains subscribers who are especially cost conscious and many of whom are disadvantaged or in poverty. Cricket also operates in the pre-paid market which attracts low income users, unlike the post-paid market that is the domain of market leaders like Verizon and AT & T.

GEICO Insurance is another low cost provider that operates in the insurance market. Insurance is a highly competitive…

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