BACHELOR OF BUSINESS ADMINISTRATION

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BUSINESS ADMINISTRATION

STRATEGIC MANAGEMENT

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Cost leadership is a lower-cost competitive strategy that aims at the broad mass market and requires “ ____ of efficient-scale facilities, vigorous pursuitof cost reductions from experience, tight cost and overhead control, avoidance ofmarginal customer accounts, and cost minimization in areas like R&D, service, salesforce, advertising, and so on.
A
aggressive construction
B
defensive construction
C
effective construction
Explanation: 

Detailed explanation-1: -A cost leadership strategy aims to exploit scale of production, well-defined scope and other economies (e.g., a good purchasing approach), producing highly standardized products, using advanced technology. In recent years, more and more companies have chosen a strategic mix to achieve market leadership.

Detailed explanation-2: -Definition: Cost leadership is a term used when a company projects itself as the cheapest manufacturer or provider of a particular product or commodity in a competition. It is difficult to deploy the strategy because the management must constantly work on reducing cost at every level to remain competitive.

Detailed explanation-3: -The cost leadership strategy is a business model that focuses on reducing the cost of production and offering the lowest priced products to outperform competitors and gain market share.

Detailed explanation-4: -Cost leadership is a low-cost, broad-based market strategy. Firms utilizing a competitive scope strategy can tailor advertising and promotional efforts to a particular market niche. Strategic management process is the coordinated means by which an organization chooses its mission and vision.

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