A competitive strategy of striving to be the low-cost provider is particularly attractive when
A)buyers are not price sensitive.
B)the industry is made up of a large number of or equal-sized rivals.
C)there are many ways to achieve product differentiation that have value to buyers.
D)price competition is especially vigorous,buyers have low switching costs,and the majority of industry sales are made to a few large-volume buyers.
E)switching costs are high,price competition is strong,and buyers tend to use the industry's products in many different ways.

Question

Quizplus · Accepted Answer

A low-cost strategy is particularly attractive in industries where price competition is strong, buyers have low switching costs, and the majority of industry sales are made to a few large-volume buyers. In such a scenario, offering the lowest price can help the company win business from these large buyers, and low switching costs mean that customers are more likely to switch to a low-cost provider. Additionally, strong price competition means that reducing costs can help the company survive and thrive in the market.

A Competitive Strategy of Striving to Be the Low-Cost Provider