Reply To: Why are low cost airlines………..

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If you look at the work of Prof Michael Porter of Harvard Business School, one of his famous theories is ‘generic stategies.’

One of these generic strategies is cost leadership and the term ‘low cost’ derives from this, as in achieving low costs in pursuing the strategy.

If your firm achieves cost leadership, then it can attack competitors aggressively or harvest a bigger margin. Think Ryanair.

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