Which of the Following Is a Risk (Or Pitfall)of Cost

question 49

Multiple Choice

Which of the following is a risk (or pitfall) of cost leadership?

• A) the strategy is too easily imitated
• B) attempts to stay ahead of the competition may lead to gold plating
• C) cost differences increase as the market matures
• D) producers are more able to withstand increases in suppliers' cost

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Definitions:

Prospector Strategies

Business strategies focused on growth and innovation, seeking out new markets, opportunities, and technologies to maintain competitive advantage.

Porter's Generic Strategies

A framework that outlines three strategies businesses can use to achieve competitive advantage: cost leadership, differentiation, and focus.

BCG Matrix

A strategic business tool to help organizations analyze their product lines or business units for strategic decision-making.

Strategy Formulation

The process of defining an organization's strategy or direction and making decisions on allocating resources to pursue this strategy.