A company's biggest vulnerability in employing a best-cost provider strategy is
A)relying too heavily on outsourcing.
B)getting squeezed between firms employing low-cost provider strategies and those using high-end differentiation strategies.
C)getting trapped in a price war with low-cost leaders.
D)being timid in cutting its prices far enough below high-end differentiators to win away many of their customers.
E)not having a sustainable distinctive competence in cost reduction.

Question

Quizplus · Accepted Answer

A best-cost provider strategy aims to offer products or services with superior attributes at lower costs, targeting a value-conscious customer base. The biggest vulnerability of this strategy is getting squeezed between firms employing low-cost provider strategies, which can offer lower prices, and those using high-end differentiation strategies, which offer higher perceived value. This squeeze can make it challenging for the best-cost provider to maintain a competitive advantage without sacrificing profitability or market share.

A Company's Biggest Vulnerability in Employing a Best-Cost Provider Strategy