The seven drivers of cost advantage
A)must be equally examined in all firms.
B)can be a useful framework within which to compare a firm's cost improvements in the last few years.
C)can be a useful framework within which to compare a firm's costs with its competitors.
D)can be a useful framework within which to compare a firm's profit margins with its competitors.

Question

Quizplus · Accepted Answer

The seven drivers of cost advantage can be a useful framework within which to compare a firm's costs with its competitors. This can help a firm identify areas where it may need to improve its cost structure and where it can potentially gain a competitive advantage. Examining the drivers within a company can also be helpful, but comparing them to competitors is a more useful application of the framework. The drivers may not necessarily relate directly to profit margins, so option D is not the best choice. Option A is also not the best choice as the drivers may not be equally relevant or significant for all firms. Option B is partially correct, but only in the context of comparing a firm's improvements over time to its own previous performance, rather than to competitors.

The Seven Drivers of Cost Advantage