Cost leadership means a firm must
A)exploit all sources of cost advantage before tailoring the product to each customer.
B)exploit all sources of cost advantage in providing customers with a standardised product.
C)exploit all sources of cost advantage in providing each customer with their minimum requirements.
D)exploit all sources of cost advantage while providing every customer an individual service.

Question

Quizplus · Accepted Answer

Cost leadership involves providing customers with a standardised product at the lowest possible cost. This requires a firm to exploit all sources of cost advantage in order to reduce their production costs and offer a lower price to customers. Option A is incorrect because tailoring the product to each customer would increase costs, not decrease them. Option C is incorrect because providing each customer with their minimum requirements may also involve some level of customization, which would increase costs. Option D is incorrect because providing every customer with individual service would require higher costs and would not be consistent with the goal of cost leadership.

Cost Leadership Means a Firm Must