3.3.3 Cost Leadership

For this activity:

You will need write down your answers in your Mahara e-portfolio.

We learned from this theme that cost leadership strategy concentrates on aiming to become the lowest cost producer in the industry through economies of scale.

Walmart is one of the largest companies in the world today and owns Asda in the UK. Walmart is known for its low prices. It has been estimated that 1/3 of Americans shop at Walmart each week, which hints at its success of utilising cost leadership theory to keep prices low.

Questions

1. How do you think Walmart is able to maintain this cost leadership model?
2. As an entrepreneur, what are the resources and capabilities you need to have to capitalise on a cost leadership strategy?

To better answer this question, it would help if you do some research and reading about this topic. Use the internet to recap on the cost leadership model.

You should make sure that you use at least three sources when checking that a fact is correct. You should try and limit your sources to academic sources and reputable websites such as news websites or sites that are maintained by well-known and respected organisations.   

Write your answers to your questions in as much detail as you can and record your research sources in a short references section for future review.