Question

Contour Autos competes against the global leaders in the automobile industry by developing and selling acceptable quality vehicles at a lower price. This has been possible due to the company's large-scale production that reduces its manufacturing expenses. Which of the following generic business strategies is Contour Autos applying in this scenario?a. differentiation strategy.
b. product diversification strategy.
c. cost-leadership strategy.
d. liquidation strategy.

Answer 1

Answer:

C. Cost leadership strategy

Explanation:

Cost leadership strategy involves creating a competitive advantage in an industry by having the lowest cost of production in that industry. It involves selling similar product as your competitors at lower prices because of lower cost of production. Efficiencies in production are increased to reduce cost of production below the industry average. In this case, Contour Autos by selling acceptable quality vehicles at lower price due to the company's large scale production which increases efficiency and reduces cost is practicing cost leadership strategy.