Before we get into the details of achieving status as the Lowest-Cost Producer within your market, let’s tackle the difference between cost and price. LCP status is simply producing a product or delivering a service better and faster than the competition. That means if you don’t change the price you will have better margins than the competition or you can reduce the price and have the same margin as the competitor - both are excellent positions in the market.

You can use the additional margin to increase your marketing spend or price reductions, which will not hurt you, to buy market share from the competition. Usually it will force them to do the same and because of lower margins they are jeopardizing the health of the company.

The easiest method, especially if you are starting from scratch, is to use the value mapping process.