Cost leaders only remain competitive as long as consumers view their products and services substantially equivalent to more expensive competitors.
In the context of cost leaders, the statement is true. Cost leaders are companies that offer products or services at a lower price compared to their competitors. To remain competitive, cost leaders must ensure that consumers perceive their products or services to be of similar quality and value as those offered by more expensive competitors. If consumers do not view the cost leader's offerings as substantially equivalent, they may be willing to pay more for the perceived higher quality or choose a different product altogether.