Core Competencies Enable a Firm to Reduce the Costs of Value

question 27

True/False

Core competencies enable a firm to reduce the costs of value creation and/or to create perceived value in such a way that premium pricing is possible.

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Definitions:

Pervasive Costs

Costs that are widespread and difficult to directly relate to any specific product or segment of a business.

Factory Overhead

Indirect costs associated with manufacturing, including expenses related to operating the factory like utilities, maintenance, and salaries of support staff.

Manufacturing Cost Category

Classification of costs related to the production process, typically including direct materials, direct labor, and manufacturing overhead.

Cost of Goods Sold

Expenses directly incurred from producing goods a company sells, such as costs for materials and labor.