My research 
shows that ignoring cut-price rivals is a mistake. Companies need to respond quickly and effectively. Be it in the classroom or the boardroom, executives invariably ask me the same question: Are low-cost businesses a permanent, enduring threat? Most managers believe that a business that sells at prices dramatically lower than those incumbents charge must go bankrupt. But take the case of low cost US airlines. By slashing fares and cutting frills, entrants like Southwest Airlines and JetBlue have grabbed a chunk of America’s domestic air travel market and made money too by using several tactics. They focus on just one or a few consumer segments; deliver the basic product or provide one benefit better than rivals do; and have super efficient operations to keep costs down.
For Complete IIPM Article, Click on IIPM Article
shows that ignoring cut-price rivals is a mistake. Companies need to respond quickly and effectively. Be it in the classroom or the boardroom, executives invariably ask me the same question: Are low-cost businesses a permanent, enduring threat? Most managers believe that a business that sells at prices dramatically lower than those incumbents charge must go bankrupt. But take the case of low cost US airlines. By slashing fares and cutting frills, entrants like Southwest Airlines and JetBlue have grabbed a chunk of America’s domestic air travel market and made money too by using several tactics. They focus on just one or a few consumer segments; deliver the basic product or provide one benefit better than rivals do; and have super efficient operations to keep costs down.For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2006
An IIPM and Management Guru Professor Arindam Chaudhuri's Initiative
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