Question

A focused low-cost strategy ...A) cannot be sustained over time unless the focuser is aggressive in entering other segments where it also can achieve a low-cost advantageB) is the hardest of the four generic types of competitive strategies to employ successfullyC) involves serving buyers in the target market niche at a lower cost and a lower price than rival competitorsD) involves the use of deep price discounting to capture customersE) entails trying to wrest market share away from rivals via extra advertising, above-average expenditures for promotional programs, and heavy use of point-of-sale merchandising techniques

Answer 1

Answer:

The correct answer are A and E.

Explanation:

Cost leadership is where the company intends to be the lowest cost producer in its industrial sector. The company has a broad picture and serves many segments of the industrial sector, and can still operate in related industrial sectors. The breadth of the company is often important for its cost advantage. The sources of cost advantages are varied and depend on the structure of the industrial sector. They can include the persecution of economies of scale of own technology, preferential access to raw materials.

A successful cost leadership strategy is disseminated throughout the company, as evidenced by high efficiency, low overhead, limited benefits, waste intolerance, thorough review of budget requests, extensive control elements, rewards linked to cost concentration and extensive employee participation in attempts to control costs.

Some risks of following cost leadership is that competitors could mimic the strategy, decreasing the profits of the industry in general; that technological advances in the industry could make the strategy ineffective or that the interest of the buyers could be diverted towards other characteristics of differentiation besides the price.