A Company's Biggest Vulnerability in Employing a Best-Cost Provider Strategy

question 14

Multiple Choice

A company's biggest vulnerability in employing a best-cost provider strategy is

• A) relying too heavily on outsourcing.
• B) getting squeezed between the strategies of firms employing low-cost provider strategies and high-end differentiation strategies.
• C) getting trapped in a price war with low-cost leaders.
• D) being timid in cutting its prices far enough below high-end differentiators to win away many of their customers.
• E) not having a sustainable distinctive competence in cost reduction.

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Definitions:

Rationality

The quality of being based on or in accordance with reason or logic, often discussed in the context of decision-making processes.

Logical Thinking

The process of reasoning consistently and rigorously, often following a sequence of steps based on established rules and principles.

Ego

In psychoanalytic theory, the part of the psyche that mediates between the desires of the id, the moral of the superego, and the realities of the external world.

Socializing Agent

An individual, group, or institution that plays a role in integrating individuals into the norms, values, and cultures of their society.