Which of the following is true about cost leadership strategy?
A) In this strategy, firms seek to make their product or service different from those of competitors.
B) The key to this strategy is to add value at a cost that produces a superior margin.
C) Firms using this strategy charge slightly higher than industry-average prices.
D) One of the ways of achieving cost leadership is by using special technology.

Question

Quizplus · Accepted Answer

The correct statement about cost leadership strategy is that one of the ways of achieving cost leadership is by using special technology. Option A is incorrect because cost leadership strategy focuses on producing and delivering a low-cost product or service, not differentiation. Option B is also incorrect because cost leadership strategy is about achieving a lower cost structure than competitors, not adding value. Option C is incorrect because firms using cost leadership strategy usually charge prices lower than industry averages to capture market share.

Which of the Following Is True About Cost Leadership Strategy