BUSINESS ADMINISTRATION
STRATEGIC MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Differentiation Strategy
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Focus Strategy
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Hybrid Strategy
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Cost Leadership Strategy
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Detailed explanation-1: -Overall lower cost or cost leadership refers to the strategy where a firm’s competitive advantage is based on the bet that it can develop, manufacture, and distribute products more efficiently than competitors.
Detailed explanation-2: -The primary objective of a firm aiming to attain cost leadership is to become the lowest cost producer in comparison to the competitors. This is usually achieved by large scale production which enables the firm to attain economies of scale or by innovating the production process.
Detailed explanation-3: -Cost Leadership Strategy This generic strategy calls for being the low cost producer in an industry for a given level of quality. The firm sells its products either at average industry prices to earn a profit higher than that of rivals, or below the average industry prices to gain market share.
Detailed explanation-4: -A firm following a cost leadership strategy offers products or services with acceptable quality and features to a broad set of customers at a low price (Figure 5.3 “Cost Leadership”). This combination of an appropriate price and value is sometimes referred to as a strong value proposition.