According to Porter, what is the cost leadership strategy?

The cost leadership strategy, as defined by Michael Porter, emphasizes being the lowest-cost producer in an industry. This approach seeks to attract price-sensitive customers by offering products or services at lower prices than competitors. By minimizing costs, a company can maintain a competitive edge and potentially gain a larger market share. This strategy often involves operational efficiencies, economies of scale, and stringent cost control measures, enabling the organization to deliver products that still meet customer expectations while maximizing profit margins.

In contrast, offering premium products at higher prices focuses on differentiation rather than cost. Niche market strategies emphasize catering to specific segments of the market with unique offerings, which does not align with the cost-focused approach. Continuous innovation aims to stay ahead of competitors but does not inherently prioritize being the lowest-cost provider. Therefore, the essence of the cost leadership strategy is fundamentally captured in the emphasis on attracting price-sensitive customers through being the lowest-cost producer.