When companies discover that low-price c
ustomer segment is large, they oft en set up low-cost ventures themselves. Because of their years of industry experience as well as abundant resources, incumbents are oft en seduced into believing that they can easily replicate cut-price operations. In the 1990s, for instance, all major airlines launched no-frills second carriers which have since been shut down or sold off , showing how tough it is. Companies should set up low-cost operations only if there are very strong synergies. For example, in the financial services industry, HSBC, ING, Merrill Lynch and Royal Bank of Scotland have set up low-cost operations in the form of First Direct, ING Direct, ML Direct, and Direct Line Insurance, respectively.
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2006
An IIPM and Malaya Chaudhuri – Arindam Chaudhuri Initiative
More IIPM-News:-
IIPM RANKED AHEAD OF FIVE OF THE IIMS
ustomer segment is large, they oft en set up low-cost ventures themselves. Because of their years of industry experience as well as abundant resources, incumbents are oft en seduced into believing that they can easily replicate cut-price operations. In the 1990s, for instance, all major airlines launched no-frills second carriers which have since been shut down or sold off , showing how tough it is. Companies should set up low-cost operations only if there are very strong synergies. For example, in the financial services industry, HSBC, ING, Merrill Lynch and Royal Bank of Scotland have set up low-cost operations in the form of First Direct, ING Direct, ML Direct, and Direct Line Insurance, respectively.For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2006
An IIPM and Malaya Chaudhuri – Arindam Chaudhuri Initiative
More IIPM-News:-
IIPM RANKED AHEAD OF FIVE OF THE IIMS
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