A company's biggest vulnerability in employing a best-cost provider strategy is
A) relying too heavily on outsourcing.
B) getting squeezed between the strategies of firms employing low-cost provider strategies and high-end differentiation strategies.
C) getting trapped in a price war with low-cost leaders.
D) being timid in cutting its prices far enough below high-end differentiators to win away many of their customers.
E) not having a sustainable distinctive competence in cost reduction.

Question

Quizplus · Accepted Answer

The biggest vulnerability in employing a best-cost provider strategy is getting squeezed between the strategies of firms employing low-cost provider strategies and high-end differentiation strategies. This means that the company may struggle to compete with low-cost providers on price, and also struggle to differentiate themselves enough to justify higher prices than high-end differentiators. This can put the company in a difficult position and create challenges for long-term success.

A Company's Biggest Vulnerability in Employing a Best-Cost Provider Strategy