BUSINESS ADMINISTRATION
BUSINESS POLICY
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
The strategy is too easily imitated.
|
|
|
It attempts to stay ahead of the competition may lead to gold plating.
|
|
|
Cost differences increase as the market matures.
|
|
|
Producers are more able to withstand increases in suppliers’ cost.
|
Detailed explanation-1: -In some settings, the need for high sales volume is a critical disadvantage of a cost leadership strategy. Highly fragmented markets and markets that involve a lot of brand loyalty may not offer much of an opportunity to attract a large segment of customers.
Detailed explanation-2: -Lack of Innovation Many companies employing the cost leadership strategy might find the cost related to the research and development team undesirable. This results in a reduction of funds which ultimately results in the lack of innovative new products, leading the management to promote the same products.
Detailed explanation-3: -The typical risks of a cost leadership strategy includea. the inability to balance high differentiation and low price.
Detailed explanation-4: -1. Which of the following is an advantage of cost leadership? a. It makes them well positioned to withstand price competition from rivals.