Cost focus is a low-cost competitive strategy that focuses on a particular buyer group or geographic market and attempts to serve only this niche, to the exclusion of others (Hunger, Wheelen , 2011). Some examples of companies that have adopted a cost-focused strategy include Checkers restaurants, Redbox video rental and Mercedes Benz. These companies avoid direct competition with larger companies such as McDonald's, Blockbuster, or General Motors. By evaluating a narrow focus that allows them to better serve their narrow strategic markets, these companies have been able to target their customers more effectively than their competitors. Checkers uses buildings that are cheaper to build, Red Box Video Rental uses vending machines inside department stores like Wal-Mart, and Mercedes Benz uses cutting-edge manufacturing technologies, style, and safety features to attract its customers. However, these companies have had to make trade-offs between profitability and market share. Serving the specialized needs of a niche market lacks the economy of scale needed to create large profits
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