Company A has a product that hasn't hit the market yet but has already constructed efficient manufacturing facilities and has lowered costs through learning effects. It has a marketing team in place that has initiated an aggressive advertising campaign with sales promotions that have stimulated demand for the product and accumulate sales volume. Which of the following is true of Company A?
A) This strategy would help Company A move down the experience curve quickly.
B) This strategy would hinder Company A's move down the experience curve and allow rival companies to have a cost advantage.
C) This strategy would allow Company A to decrease product volume and market share.
D) This strategy would not allow Company A to reach superior efficiency.
E) This strategy would enable Company A to ride up the experience curve and gain a competitive advantage over its rivals.

Question

Quizplus · Accepted Answer

By constructing efficient manufacturing facilities and stimulating demand through aggressive marketing, Company A can increase production volume, which helps it move down the experience curve quickly, reducing costs and gaining a competitive advantage.

Company a Has a Product That Hasn't Hit the Market