A Focused Low-Cost Strategy Can Lead to Attractive Competitive Advantage

question 107

Multiple Choice

A focused low-cost strategy can lead to attractive competitive advantage when

• A)buyers are looking for the best value at the best price.
• B)buyers are looking for a budget-priced product.
• C)buyers are price sensitive and are attracted to brands with low switching costs.
• D)a market is emerging and demand in the target market niche is growing rapidly and is served by industry-wide competitors.
• E)a firm can lower costs significantly by limiting its customer base to a well-defined buyer segment.

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Definitions:

Actual Manufacturing Overhead

The actual costs incurred in the production process that cannot be directly attributed to specific units of product, including costs such as maintenance and utilities.

Cost of Goods Available

The total cost of goods that are ready for sale at the end of an accounting period, including both newly manufactured goods and those previously in inventory.

Schedule of Cost

A detailed report displaying the various components of cost, including materials, labor, and overhead.

Operations Data

Information and statistics related to the activities of a business, including production, sales, inventory, and labor, used for analysis and decision-making.