A competitive strategy to be the low-cost provider in an industry works well when
A)price competition among rival sellers is especially sluggish.
B)there are numerous ways to achieve product differentiation that have no value to buyers.
C)buyers incur high costs in switching their purchases from one seller/brand to another.
D)industry newcomers use introductory low prices to attract buyers and build a customer base.
E)industry newcomers use high introductory prices to let buyers know they have a superior product to build a customer base.

Question

Quizplus · Accepted Answer

A competitive strategy to be the low-cost provider is particularly effective when industry newcomers use introductory low prices to attract buyers and build a customer base. This approach allows the established low-cost provider to maintain or even increase its competitive edge by leveraging its cost advantage to keep prices lower than those of the newcomers, thereby protecting its market share and discouraging new entrants.

A Competitive Strategy to Be the Low-Cost Provider in an Industry