Final answer:
The company should regularly review its production costs to maintain a low total production cost for producing branded footwear. This includes labor, materials, technologies, and efficiency of the production process. Awareness of market structure is also vital for long-term competitiveness.
Step-by-step explanation:
If a company is pursuing a strategy to produce branded footwear at a low total production cost relative to rival companies, it should regularly review its production costs. This encompasses an analysis of all facets of production including the cost of labor, materials, technologies, and processes used. By consistently analyzing and optimizing production costs, the firm can maintain its competitive edge.
To ensure competitiveness, the company should also evaluate how much output they should produce and how much labor to employ, also taking into consideration the market structure, which affects market power, product differentiation, and barriers to entry. When machines become more expensive, a shift towards less capital-intensive production processes might be beneficial. This mirrors the situation in the 1970s United States, where limited demand suggested a contraction in the number of competitive firms.