Final answer:
Achieving a cost advantage involves optimizing the production process and specializing in certain value chain activities to gain efficiencies. The production of the iPhone is an example of how splitting up the value chain across different countries can lead to specialization and cost advantages. Businesses also gain competitive edges by focusing on their core competencies and innovating.
Step-by-step explanation:
The question is centered on how a company can achieve a cost advantage over its competitors. Achieving a cost advantage entails finding methods to produce goods or services more efficiently than rivals, which can be done by innovating or streamlining the production process. The value chain, which describes the full production process from design to finished product, plays a significant role in this.
By splitting up the value chain and specializing in certain segments, firms can benefit from efficiencies and gain cost advantages. For instance, the iPhone's production process is spread across various countries, allowing each part of the value chain to be optimized for cost and efficiency.
Additionally, firms that focus on their core competencies tend to be more successful, as they can innovate and improve their products or production techniques, gaining a competitive edge and potentially earning above-normal profits.
Therefore, achieving a sure cost advantage does not only involve choosing one of the options (A to E) given in the question but also understanding that cost leadership can be a result of various strategic decisions like specialization, innovation, efficient scale of operations, and making the best use of core competencies within the value chain.