Which of the following examples illustrates a firm that has achieved competitive advantage through costs?
A) A firm that uses patented technology to deliver goods and services to customers on time
B) A firm's ability to adjust and adapt to different demographic segments and satisfy their needs
C) A firm that invests only a small amount on promotion and maximizes profits by charging low prices
D) A firm's technology that creates high quality products and services
E) A firm that specializes in developing timely new products

Question

Quizplus · Accepted Answer

A firm that invests only a small amount on promotion and maximizes profits by charging low prices is an example of a firm that has achieved competitive advantage through costs. By keeping their costs low, they are able to offer lower prices to customers than their competitors and still make a profit, which can attract more customers and lead to increased market share. This is also known as a cost leadership strategy. The other choices, while they may contribute to a firm's competitive advantage in other ways, do not specifically relate to achieving competitive advantage through costs.

Which of the Following Examples Illustrates a Firm That Has