A pitfall of integrated overall cost leadership and differentiation is underestimating the expenses associated with coordinating value-creating activities in the extended value chain.

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Integrating activities across a value chain of a firm with the value chain of suppliers and customers involves a significant investment in financial and human resources. Firms must consider the expenses linked to technology investment, managerial time and commitment, and the involvement and investment required by the customers and suppliers of the firm. The firm must be confident that it can generate a sufficient scale of operations and revenues to justify all associated expenses.

A Pitfall of Integrated Overall Cost Leadership and Differentiation Is