STRATEGIC OPTIONS OF THE LOW-COST COMPANIES

Laura Diaconu ()
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Laura Diaconu: Faculty of Economics and Business Administration, “Al. I. Cuza” University Iasi, Romania

The Annals of the "Stefan cel Mare" University of Suceava. Fascicle of The Faculty of Economics and Public Administration, 2009, vol. 9, issue 1(9), 81-87

Abstract: The market of the low-cost companies includes those firms, national or multinational, that offer goods and services at low prices. The implementation of the price stra tegy, which is based on various methods of cutting costs, is favourably influenced by the existence of some factors that act not only inside but also outside a firm. Among these factors there are, on one side, the level of costs, of the profits, the return s on investments, the terms of payments, the ability of using the resources, the competitiveness of the products, their added value and, on the other side, the existence of some substitutes for products, the competitive pressure and the consumers’ needs an d wishes. In order to explain all these factors and to emphasize the way in which they generate competitive advantages to the low -cost firms, we made a large analysis and synthesis of the approaches existent in the specialized literature. The proposed them e also required some mathematic equations, whose interpretation justifies the essential role played by costs inside the price strategy.

Keywords: low-cost companies; price strategy; cutting costs method; competitive advantage (search for similar items in EconPapers)
Date: 2009
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