Low cost business model
2010
06/12/2010
I- Introduction
In the recent years there has been an increased demand for security shoes. In many industries the workers have to wear security shoes these days due to European regulations in this context. The comfort of these shoes is mostly low and so the level of satisfaction has declined among workers because of the fact that they have to wear uncomfortable shoes all day long. The increased dissatisfaction and level of pain is a major problem for companies because the workers are more ill and have a decreased efficiency, which results in a negative performance for the company. Solutions to this problem are special shoe inserts, which often do not fit properly or high cost solutions like premium security shoes which have a much higher price than normal security shoes.
Due to the fact that shoe can be made out of several components we want to create a low-cost security shoe which is highly adaptable to the feet of the workers so the occurring problems with the comfort of wearing can be eliminated or at least reduced. The shoes would have low production costs because the components would be made in mass-production and combined to serve highest comfort and increase wealth while remain a cheap solution. Furthermore this single-model shoe should provide protection against various threats like protection against slipping, cutting injuries or falling goods. So the shoe is a standard solution for most of the threats within a company. Additional protection can be bought for the protection against rare threats like special chemicals. II- Can we compete with a low cost business model?
In order to succeed with a low cost business model the industry has to fulfill curtain criteria. So the industry has to have low barriers to entry and to exit. This point is fulfilled due to the fact that no huge assets are needed because we outsource production and beside this, there are no long term