Question

What is one potential disadvantage of a cost leadership strategy created by technology?

A. If the technology is not owned by the firm, the advantage often instead goes to the owner of the technology.
B. It can only be used by large companies.
C. It usually requires an increase in the bureaucracies in the organization leading to creation of diseconomies of scale.
D. It completely prevents creation of a learning curve.

Answer 1

One potential disadvantage of a cost leadership strategy created by technology is that if the technology is not owned by the firm, the advantage often instead goes to the owner of the technology.

Step-by-step explanation:

One potential disadvantage of a cost leadership strategy created by technology is that if the technology is not owned by the firm, the advantage often instead goes to the owner of the technology. This means that the firm using the technology may not have full control over it, and they may have to pay licensing fees or rely on a third party for support. For example, if a company uses a specific software for cost reduction and efficiency, but the software is owned by another company, the advantage of using that technology may go to the software owner instead of the company implementing it.