Under which condition would a cost leadership strategy be especially effective?
A) When there are many ways to differentiate the product or service and many buyers perceive these differences as having value.
B) When buyer needs and uses are diverse.
C) When few rival firms are following a similar approach
D) When technological change is fast paced and competition revolves around rapidly evolving product features.
E) When the products of rival sellers are essentially identical and supplies are readily available from any of several eager sellers.

Question

Quizplus · Accepted Answer

A cost leadership strategy is most effective when the products of rival sellers are essentially identical and supplies are readily available from any of several eager sellers. This reduces the scope for differentiation, which means buyers are more likely to choose the cheapest option. In this situation, cost leadership allows a company to achieve a competitive advantage and generate above-average profits. This is particularly true when the market is large and there are economies of scale to be gained through efficient production methods.

Under Which Condition Would a Cost Leadership Strategy Be Especially