Question

Walmart initially used a focused cost leadership strategy to compete only in small communities by using sophisticated logistics systems and efficient purchasing practices to gain a competitive advantage. The response of local competitors was __________ because they __________.

Answer 1

The response of local competitors was slow because they lacked the ability to marshal resources.

Explanation:

The focused cost leadership is a tactic in which businesses selling identical goods in a given market reduce their prices to raise sales and gain a competitive edge.  Rather than sacrificing on value or already investing scarce resources to develop a commodity, reducing prices is a safer way to draw consumers. Walmart used such strategy to establish an edge in smaller communities but local competitors response was time taking as the resources were available but coordination among resources to result into proper manufacturing or servicing was lacking.