How would a low-cost price leader enforce its leadership through implied threats to a rival? Provide at least one example of such a strategy.
In the past, there used to be companies that specialized in certain products and there was no one to match them or compete them in that specific line due to the quality of that product and its low price. But since then, time has changed. Now, we can see a price range for the same genre of product in different qualities with a Made in China tag. This has made big companies that specialized in certain products think about how to survive this competition by Chinese products which have a range of quality available with different prices, some of which are even less than the prices set by the big corporations. My answer to this question is focusing on quality and creating more awareness among the consumers. Another strategy, which has been employed by many companies is to get your production done in China with cheaper labor and less taxation compared to USA. Companies in Europe may find Poland and Czech Republic to be better alternative to China due to their proximity to Europe and may be able to produce cheap (Alternatives to China, 2016).
To beat its competitors and reduce the costs of its products to provide cheap circuit boards for medical equipment’s, Jabil Inc. moved several of its assembly lines to Mexico and some Asian countries in 2013 (McCormack, 2013). The move did help Jabil decrease their production costs but it came at a cost of 500 job loses for USA. The option of moving their assembly lines to other countries to counter the low-cost price of Jabil is also open to its competitors. So when that time comes, Jabil may need to revisit their business strategies and come up with more innovative strategies to be a low cost leader in the line of business it does.
Alternatives to China. (2016). Economist.com. Retrieved from https://www.economist.com/news/business-and-finance/21614076-rethinking-low-cost-and-high-cost-manufacturing-locations-when-cheap-not-so-cheap
McCormack, R. (2013). Retrieve from https://www.manufacturingnews.com/news/TAA0731131.html