Being the Overall Low-Cost Provider in an Industry Has the Attractive

question 76

Multiple Choice

Being the overall low-cost provider in an industry has the attractive advantage of

• A)building strong customer loyalty and locking customers into its product because customers have high switching costs.
• B)giving the firm a very appealing brand image.
• C)putting a firm in the best position to win the business of price-sensitive customers and earn profits by setting the floor on market price.
• D)putting the company in a strong position to be more profitable than companies pursuing a differentiation strategy.
• E)greatly reducing the strong bargaining power of rivals with the key distributors.

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Definitions:

Divergent Thinking

A thought process or method used to generate creative ideas by exploring many possible solutions, emphasizing spontaneity and non-linear approaches.

Heuristic

A rule of thumb that is derived from experience and used in decision making and problem solving, even though there is no guarantee of its accuracy or usefulness.

Insightful

Having or showing an accurate and deep understanding; perceptive.

Convergent

Relating to or involving the coming together of lines, ideas, or pieces of information so they eventually merge.