While there are many different concepts regarding what constitutes effective company strategy, most will focus on three key areas as the foundation for all methodologies that combine to make up the overall approach to running the business. The first of these three is the cost of operation. Since the idea of any company is to make a profit, it is essential to understand how much it will take to generate products that are ultimately sold to customers. By understanding all costs involved in this process, and learning how to manage those costs with the greatest degree of efficiency while still maintaining high quality, the company is in a better position to determine the minimum rate or price for the products needed to earn some type of profit. From there, retail prices can be determined by applying the basic laws of supply and demand, allowing the business to offer products that consumers desire at a price they are willing to pay.