Question

The owners of Carpo Inc., a watch company, also own a steel company and a leather goods manufacturing company. This relieves them from expenses that they would have to bear, if they had to rely on outside sources for the raw materials needed to make their watches. This enables the company to produce watches at a much lesser cost than other companies in the industry. This scenario best illustrates a ________.A. complementary service
B. emergent strategy
C. unique value
D. cost advantage

Answer 1

Answer: cost advantage  

 

Explanation: In simple words, cost advantage refers to the advantage earned by the company due to their ability to produce a product at lower cost than others.

In the given case, Carpo inc,. is also the owner of steel and leather companies thus they can make watches at a lower cost as they do not have to bear to profit margin that the external supplier will be getting from them.    

Hence from the above we can conclude that the correct option is D.