The Value to a Company of Pursuing a Low-Cost Provider

question 47

Multiple Choice

The value to a company of pursuing a low-cost provider strategy is contingent upon

• A)the leader's ability to combine the cost advantage with a reputation for good quality.
• B)the leader's ability to excel in manufacturing innovation so as to continuously reduce its manufacturing costs.
• C)the leader's ability to attain the biggest market share in the industry.
• D)whether or not it is easy or inexpensive for rivals to copy the low-cost leader's methods or otherwise match its low costs.
• E)the aggressiveness with which the low-cost leader pursues converting the cost advantage into the absolute lowest possible costs.

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Definitions:

Form 2106

A tax form used by employees to deduct work-related expenses not reimbursed by their employer when such expenses exceed 2% of their adjusted gross income.

Schedule C

A tax form used by sole proprietors in the United States to report their business income and expenses to the IRS.

Form 1040

The routine IRS document prepared by individuals to declare their income for the tax year on an annual basis.

Qualified Education Loan

A loan taken out solely to pay qualified higher education expenses for the borrower, the borrower's spouse, or the borrower's dependent.