What is Cost Advantage?

A cost advantage is the competitive edge, or advantage, gained due to lowering a products or service’s price point through economies of scale or other cost-reduction approaches.

Traditional approaches to cost reduction are predominantly reactive and focus on “top slicing” across the organization, which implies taking a part of the budget and allocating it to a specific project. This, however, means that the cost advantage is often short-lived. A better approach is to opt for cost optimization tools such as should-cost modeling and demand planning amplify agility and scalability, accelerating profitability and growth, thereby enabling the enterprise to leverage the cost advantage for sustained periods.

Read more to learn about GEP’s should cost analysis services.

Related Terms

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