October 25, 2020

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Why low cost mobile companies are winning?

Why low cost mobile companies are winning?

The business world is such that there are a lot of companies that are competing...

Why low cost mobile companies are winning?The business world is such that there are a lot of companies that are competing with each other. They aim to get the attention of customers who are interested in buying their products. In the past, having a company imply that you must have a strong physical presence and branches in all the locations you want to sell to. However, the Internet has made it possible to operate a low-cost mobile company. Many entrepreneurs have been taking advantage of this opportunity and making great gains. Here are some of the reasons why low-cost mobile companies are winning.

Low cost of running a business
As opposed to having several branches that will result in buying office space or paying of rent, it is now possible to run a business that will cater to a wide location from a single office space or no office space at all. The implication is that there is also no need for recruiting staffs that would have been required to manage and operate all of those branches. With this, companies can save a lot of production and operating cost. By the time they subtract most of this cost from the selling price of their products and services, it becomes easier to sell their products at a cheaper price.

Price is a major determinant for customers
For many customers, they are trying to spend as little as possible on each item they need or want so that they can get more items or save more money. Hence, they do patronize companies that sell the products or services they need at a low price. Low-cost mobile companies have an advantage here as they can sell their products and services at a lower price while remaining profitable compared to high-cost non-mobile companies. This means that low-cost companies can attract more customers and make more profit. Their customer while discovering neutral websites with online reviews will be able to read about their low prices and efficiency. Hence, they would be content with patronizing them even when their high-cost competitor has similar positive reviews only with complaints that the prices are higher than the low-cost companies.

Low expenses mean a low risk of shutting down
The reason why most companies shut down is that they have a huge overhead cost. Offices scattered all over the areas they operate and several staffs in each of those offices. Hence, they need huge sales to offset their bills before they start talking about profits. However, with low-cost mobile companies, minimal income will be enough to sustain them and they might even have some profit. Hence, companies with minimal cost and very few customers will find it easier to survive compared to companies with huge costs and more customers.

Fewer staffs mean fewer mistakes
With low-cost mobile companies, they mostly only have a control centre where they operate from. The implication is that it is easier to manage the whole staff and process and reduce the chances of things going wrong. However, when a business has branches spread all over the place, a branch could make a mistake that would rub off on the whole company. People will learn that the company made a particular mistake without emphasis on the branch that made the mistake or the fact that was a one-off scenario. It might be difficult for the company to survive the negative publicity depending on how popular they already were.