Question

A jeans company is pursuing a low-cost strategy and has achieved a position in which it is the lowest-cost manufacturer of denim products. One of the ways the company can achieve a competitive advantage against its rivals is to:a. undercut them in a price war to increase volumes and drive weaker low cost rivals out of business.

b. add features and cost to the jeans to compete with higher priced differentiated brands.
c. build brand loyalty through an intense marketing and media blitz.
d. focus on selling a wide variety of jean styles and colors to appeal to different market segments.

Answer 1

a. undercut them in a price war to increase volumes and drive weaker low cost rivals out of business.

Step-by-step explanation:

Having a relative Lowe cost of production is a competitive advantage a firm has over others in the market. Because the firm can give products out at lower prices and still remain profitable while other firms cannot do the same.

The best strategy for the denim company will be to produce large volumes of denim jeans at low prices the competition cannot match. This will eventually throw the competition out of business.