Question

A company's cost competitiveness is largely a function of:

a) Whether it does a good enough job of benchmarking its value chain activities against the value chains of competitors so that it knows exactly how low to drive its costs to be cost-competitive.

b) How efficiently it manages its internally performed value chain activities and the costs in the value chains of its suppliers and forward channel allies.

c) Whether it possesses a better job of building its resource strengths more cost effectively than rivals.

d) Whether it possesses more core competencies and competitive capabilities than its rivals.

Answer 1

A company's cost competitiveness is largely determined by how efficiently it manages its value chain activities and costs, as well as benchmarking against competitors to drive costs lower.

Step-by-step explanation:

The cost competitiveness of a company is largely a function of how efficiently it manages its internally performed value chain activities and the costs in the value chains of its suppliers and forward channel allies. This means that a company needs to effectively control and optimize its production and cost conditions. It also needs to assess and benchmark its value chain activities against competitors to understand how low it needs to drive its costs to be cost-competitive.

For example, a company that can optimize its production processes, negotiate favorable supplier contracts, and streamline its distribution channels can achieve lower costs and gain a competitive advantage in terms of price.

A company's cost competitiveness is not solely determined by the possession of more core competencies and competitive capabilities compared to its rivals or the ability to build resource strengths more cost effectively. While these factors can contribute to a company's overall competitiveness, the focus should be on efficient management of value chain activities and cost optimization.