Which of the following is a risk (or potential pitfall) of cost leadership?
A)Cost cutting may lead to the loss of desirable features.
B)Attempts to stay ahead of the competition may lead to gold plating.
C)Cost differences increase as the market matures.
D)Producers are more able to withstand increases in supplier costs.

Question

Quizplus · Accepted Answer

Potential pitfalls of overall cost leadership strategy include too much focus on one or a few value-chain activities; all rivals share a common input or raw material; the strategy is imitated too easily; a lack of parity on differentiation; and erosion of cost advantages when the pricing information available to customers increases.

Which of the Following Is a Risk (Or Potential Pitfall)