Which of the Following Is Not One of the Pitfalls

question 9

Multiple Choice

Which of the following is not one of the pitfalls of a low-cost provider strategy?

• A) overly aggressive price cutting
• B) using a cost-based advantage to improve the company's bargaining position with high-volume buyers
• C) using approaches to reducing costs that can be easily copied by rivals
• D) cutting prices more than the size of a company's cost advantage
• E) becoming so fixated on cost reductions that products become too features-poor

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Definitions:

Primary Criterion

The most important standard or measure used to evaluate or judge a variable, situation, or decision-making process.

Prime Costs

The combined costs of direct labor and direct materials involved in the production of goods.

Factory Overhead

includes all the indirect costs associated with manufacturing, such as utilities, maintenance, and salaries of indirect labor.

Direct Labor

The labor costs directly associated with the manufacturing of a product, including wages of workers physically involved in production.