Question

A competitive strategy predicated on low-cost leadership tends to work best when:

A. there are widely varying needs and preferences among the various buyers of the product or service.
B. there are many market segments and market niches, such that it is feasible for a low-cost leader to dominate the niche where buyers want a budget-priced product.
C. price competition among rivals is especially vigorous and the offerings of rival firms are essentially identical, standardized, commodity-like products.
D. buyers prefer that the products/services of competing sellers have widely varying attributes and prices.
E. buyers have high switching costs and there is considerable diversity in how buyers use the product.

Answer 1

A low-cost leadership competitive strategy is effective in markets with intense price competition and standardized products, where cost efficiency and focus on core competencies enable a firm to offer the lowest prices.

Step-by-step explanation:

A competitive strategy predicated on low-cost leadership tends to work best in scenarios where price competition among rivals is especially vigorous and the offerings of rival firms are essentially identical, standardized, commodity-like products. This particular competitive strategy is effective when the primary buying factor for customers is the price, as low-cost leaders can capitalize on their cost advantage to offer the lowest prices. Firms focusing on core competencies can often position themselves as low-cost leaders by achieving higher efficiency and economies of scale in their specialized areas.