Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 4

What is a commodity? Give some examples of what you consider to be commodities and explain whether you think the company making the commodity product or service is a cost leader or a differentiator and why.

Step 1 of 5

A commodity refers to a useful or a valuable thing that can be bought, sold or capable of trading. A commodity is considered as a basic good in commerce which can be exchanged with other goods of the same type. Basically, a commodity is a raw material for other goods and services as further value addition is still pending and after adding values and transforming a commodity, it will become a ready product for sale.