Unless a company has the resources and capabilities to incorporate upscale product or service attributes at a lower cost than rivals, adopting a best-cost strategy is ill-advised because the company lacks the ability to execute it.
The target market for a best-cost provider is value-conscious buyers–buyers looking for appealing extras and functionality at an appealingly low price.
The competitive advantage of a best-cost provider is lower costs than rivals in incorporating upscale attributes, thus putting the company in a position to underprice rivals whose products have similar upscale attributes.
A best-cost provider strategy aims at attracting buyers on the basis of having the industry’s overall best-performing product and charging a price that is slightly below the industry-average price.
Being a best-cost provider is different from being a low-cost provider.
