A potential weakness of the cost leadership strategy is:
A)Cutting costs in a way that causes the firm to grow too fast.
B)Deleting key features or reducing quality of products or services.
C)Lowering productivity to ensure lower costs.
D)Increasing life cycle costs.
E)Increasing prices temporarily to undermine competition.

Question

Quizplus · Accepted Answer

The cost leadership strategy entails minimizing costs to offer products or services at the lowest possible prices. This can result in the deletion of key features or reduction in quality to further cut costs. This may eventually lead to customer dissatisfaction and declining sales, making this a potential weakness of the cost leadership strategy. The other options are not common weaknesses of this strategy.

A Potential Weakness of the Cost Leadership Strategy Is