A focused low-cost strategy can lead to attractive competitive advantage when
A)buyers are looking for the best value at the best price.
B)buyers are looking for a budget-priced product.
C)buyers are price sensitive and are attracted to brands with low switching costs.
D)a market is emerging and demand in the target market niche is growing rapidly and is served by industry-wide competitors.
E)a firm can lower costs significantly by limiting its customer base to a well-defined buyer segment.

Question

Quizplus · Accepted Answer

A focused low-cost strategy can lead to attractive competitive advantage when a firm can lower costs significantly by limiting its customer base to a well-defined buyer segment. By focusing on a specific niche, the company can tailor its products and services to better meet the needs of that segment and achieve cost savings in production, marketing, and distribution. This approach is particularly effective when the target market has unique and specific preferences that are not well-served by industry-wide competitors.

A Focused Low-Cost Strategy Can Lead to Attractive Competitive Advantage