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

Exercise 27

1. Consider a commodity business such as building materials, many types of food products, and many types of electronics products. A good example of a commodity is gasoline. Are these companies likely to compete on cost leadership or differentiation, and why?

---

2. Consider professional service firms such a law firms, accounting firms, and medical practices. Are these firms likely to compete on cost leadership or differentiation, and why?

Step 1 of 3

For the cost leadership firms, the critical success factors (CSF) are related to the operational performance and quality. For the differentiated firms, the major focus is on the customer and innovation.