Strategy & Leadership

Purpose of this paper – No company is safe from low-cost rivals. Almost overnight, nimble low-cost competitors can exploit their offshore advantage, partnerships, and inexpensive technologies to break down barriers and rewrite the rules of competition. This paper aims to show how to counterattack.

Design/methodology/approach – The paper shows that way to beat low-cost competitors that have the potential to become serious competitors is to identify and deal with them early, before they get a foothold in a market.

Findings – The paper finds that the best way to identify and thwart a low-cost rival is to adopt its mindset, anticipate its next competitive move and measure your costs against its costs. This best practice analysis requires four steps.

Practical implications – “What to do” to defeat low-cost competitors involves two separate but related tasks: First, “stop the bleeding”, and second, reposition the company for success in the new market. The paper shows how to break down potential moves into short-term tactics and long-term strategies.

Originality/value – The paper shows how to win the battle with a low-cost competitor by identifying the genuine threats, taking on the serious competition, adapting its tactics quickly and hitting back with a well-placed blow.