I’ve known business owners that have made a strong marketing case for becoming and being the low cost provider. But it’s been my observation that the low cost position can kill a business.
The great low cost providers are vulnerable from multiple angles. Just when the system for lowering costs has been fully refined, somebody else inevitably comes up with a better system and cheaper suppliers. And as if this problem isn’t enough, these business owners find it virtually impossible to inspire their employees due to limited budgets, meager surroundings, and a constant need to recruit under-paid and under-appreciated workers.
Always remember, your clients and consumers can almost always find a cheaper way to get your products and services, and few efforts are less rewarding than trying to compete with the cheaper ways of their bottom-dwelling competition.
Stay away from the rock bottom.