Track: Industrial Management

Abstract

This paper highlights the implementation of cost leadership and differentiation strategy by the cement industry to gain competitive advantage. As formulated by Porter, cost leadership is one of the generic strategies framework that emphasizes on cost formulation processes, while differentiation allows a company to charge a higher price for its product or services to gain customer loyalty. For the last decades, development of infrastructures has been rapidly increasing globally, resulting in the growth of the cement industry. This creates competition in the cement industry requiring companies to determine and implement strategic initiatives to secure business sustainability. This research was conducted to define the contributing factors and present how cost leadership and differentiation strategy was implemented by cement companies to strategically maintain the cost of goods sold and implement product development affecting positively to the company's financial performance, as well as to overcome issues related to cost involved in its operation. Furthermore, the analysis also identifies which one is the most significant strategic initiative supporting cost leadership strategy affecting cost of goods sold. This research proves that cost leadership’s strategic initiatives and product development affects positively to the financial performance of the companies in a highly competitive market.