A cost leadership strategy
A)requires a commodity product.
B)requires a firm to commoditize their product - i.e. no frills - even if the industry's product is differentiable (e.g. cars or airlines).
C)can be achieved with a unique brand image.
D)can only be achieved in the modern world by outsourcing to cheap-labour countries.

Question

Quizplus · Accepted Answer

A cost leadership strategy requires a firm to focus on reducing costs and offering a lower price than competitors while maintaining acceptable levels of quality. This often requires a commoditized product, where there is little differentiation among products and customers are primarily focused on price. Firms can achieve cost leadership without outsourcing to cheap labor countries, but this may be one way to reduce costs. However, outsourcing does not guarantee cost leadership as competitors may also outsource to cut costs. A unique brand image may differentiate a firm's product from competitors but may not necessarily lead to lower costs.

A Cost Leadership Strategy