DRAWBACKS TO A LOW-COST PROVIDER STRATEGY

Technical breakthroughs open up cost reductions for rivals, negating a low-cost provider’s efficiency advantages
Rivals find it comparatively easy or inexpensive to imitate leader’s low cost methods
Low-cost provider becomes so fixated on cost reduction it fails to respond to
- Increased buyer desires for added quality or service features
- New developments in related products
- Declining buyer sensitivity to price