To Succeed with a Low-Cost Provider Strategy,company Managers Have To

question 105

Multiple Choice

To succeed with a low-cost provider strategy,company managers have to:

• A) pursue backward or forward integration to detour suppliers or buyers with considerable bargaining power and leverage.
• B) move the performance of most all value chain activities to low-wage countries.
• C) sell direct to users of their product or service and eliminate the use of wholesale and retail intermediaries.
• D) do two things: (1)perform value chain activities more cost-effectively than rivals,and (2)act proactively in revamping the firm's overall value chain to eliminate or bypass "nonessential" cost-producing activities.
• E) outsource the biggest majority of value chain activities.

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Definitions:

Prevention Cost

Expenses incurred to avoid or minimize the number of defects in products, including costs associated with quality control and training.

Life Cycle Costing

An approach that considers all the costs associated with the lifecycle of a product or asset, from acquisition through disposal, aimed at understanding the total cost of ownership.

Target Costing

A pricing method in which market prices determine the cost constraints for product development, aiming to ensure competitiveness and profitability.

Appraisal Costs

Expenses related to the testing and inspection of products to ensure they meet quality standards.