IT alone is not necessarily sufficient, but must be coupled with the efficiency of the other three elements, namely financial, business processes, and human resources. In financial management, Activity Based Costing (ABC) is a suitable technique is applied to find out how much it costs to be incurred to produce a product / service. As a management tool, Activity Based Costing support the improvement of business processes become more effective through a transparent financing. In addition, cost cutting can be done by controlling the budgets and increase operational efficiency by removing unnecessary post, reduce cycle time, and changing fixed cost into variable cost. The conventional service quality is often translated as the standard high-cost, sometimes even exceeds what consumers need. For example services such as meals taken away in flight with Air Asia. They assume that the consumer perspective the service is not an added value, thus delivered to customers as an option.

In the business process approach, efficiency can be reached by improving and stabilizing the quality and reliability of the system. Concentration on innovation to attract long-term benefits, separate funds and resources between the core business and new services, and increasing the level of competition and catch the momentum to go on the market. In this case, learn from the experiences of others through benchmarking will reduce the risk and cost. The industrialization process by doing good standardized methodology and processes, integration and automation will result in high productivity with a reasonable cost. Included in this case, implementing an efficient transaction system with consolidation of transportation, inventory, communications, until delivery to the consumer.

Approach to human resources is done by hiring key people who are competent, expert in his field, and retain them by providing employee values. Besides the corporate culture supports an efficient operation, even in companies that adopt cost leadership, their main competitors are not other companies with similar core businesses, but the cost itself.

Cost Leadership

Among the generic strategies, low cost strategy to be discussed a bit rare products of non-industry, compared to a strategy of differentiation and focus. The discussion for the products or services directly related to non-industrial consumers, usually located between differentiation strategy and focus strategy. Like overall cost advantage is owned industrial products and commodities.

However, since the Chinese products flooding the market with a price ‘irrational’ cheapness, the brand may be attached to anything, not quality assured; low cost strategy was shining again. Starting with a strategy of ‘home cheap’, even by imitation, their products flooded the world. Spinning machines continue production; human resources become more experienced and more skilled. In the spirit of improvement that they have, some Chinese industries began to enter the stage of an acceptable quality of consumers, although prices are still cheap. This means that prices are still low, an increase that enhance the quality of the added value for consumers.

Remember, perceived value for consumers is how much benefit they get, compared to the sacrifices (money) they spend. Not all consumers are willing or able to spend large sums of money, and they are willing to accept fewer benefits. No need to eat, pretty flight attendants served expensive dress, which is important to fly at a cheap price. Moreover, consumers are still many species.