Compared to a differentiator, the company that follows a low-cost strategy has the advantage of:
A)distinguishing its products from those of rivals by offering something that they fmd hard to match.
B)absorbing cost increases by powerful suppliers while keeping to their lower pricing.
C)allowing the company to charge a premium price for its good or service.
D)using perceived superior value to generate growth in demand among customers.
E)creating entry barriers for rivals with greater brand loyalty to the specific products offered.

Question

Compared to a differentiator, the company that follows a low-cost strategy has the advantage of:
A)distinguishing its products from those of rivals by offering something that they fmd hard to match.
B)absorbing cost increases by powerful suppliers while keeping to their lower pricing.
C)allowing the company to charge a premium price for its good or service.
D)using perceived superior value to generate growth in demand among customers. 
E)creating entry barriers for rivals with greater brand loyalty to the specific products offered.

Quizplus · Accepted Answer

A company following a low-cost strategy focuses on reducing costs to offer products at lower prices than its competitors. This allows the company to absorb cost increases while keeping its lower pricing intact. This enables the company to maintain its competitiveness, even when suppliers charge more for raw materials or other inputs. This gives a low-cost company an advantage over a differentiator, which may not have the capability to absorb such cost increases.

Compared to a Differentiator, the Company That Follows a Low-Cost