In order to recover its market share,the management in Xenon Inc.decide to launch a low cost line of its existing products.Which of the following arguments would most likely convince the reluctant employees of the feasibility of this strategy?
A) Cheaper raw materials would make for a cheaper product.
B) Competitors were offering goods at low prices.
C) Company is currently making a product that has low demand.
D) New technology would help mass production and price reduction.

Question

Quizplus · Accepted Answer

The argument that utilizing new technology would assist in mass production and reduction in pricing is the most compelling argument for the feasibility of launching a low-cost line. This would allow Xenon Inc. to produce products at a lower cost, making it possible to offer them at a lower price while maintaining profitability. The availability of cheaper raw materials (A) can help reduce costs but may not necessarily guarantee low pricing for the end product if the manufacturing process still requires high costs. The fact that competitors offer low prices (B) is not enough reason to pursue a low-cost line if they cannot support profitability. Also, the argument that a product has low demand (C) does not directly relate to the feasibility of launching a low-cost line.

In Order to Recover Its Market Share,the Management in Xenon