Final answer:
Cost estimates are important to determine if an organization entering a market segment can operate at costs equal to or below those of competitors.
Step-by-step explanation:
When evaluating relevant market segments, cost estimates are indeed important to determine if an organization entering a particular segment can operate at costs equal to or below those of competitors. This is because a company needs to ensure that it can offer its products or services at competitive prices in order to attract customers and generate sales. If the costs of the organization are higher compared to its competitors, it may struggle to compete effectively in the market.
For example, if a company wants to enter the smartphone market and its cost estimates indicate that it would need to price its products higher than its competitors, it may face challenges in convincing customers to choose its smartphones over the more affordable options offered by established players in the market.
Therefore, understanding and evaluating cost estimates in relation to competitors' costs is crucial for an organization when entering a market segment, as it directly impacts its ability to operate profitably and compete effectively.