Being the overall low-cost provider in an industry has the attractive advantage of:
A) building strong customer loyalty and locking customers into its product (because customers have such high switching costs).
B) giving the firm a very appealing brand image.
C) putting a firm in the best position to win the business of price-sensitive customers,set the floor on market price,and still earn a profit.
D) putting the company in a strong position to be more profitable than companies pursuing a differentiation strategy.
E) greatly reducing the strong bargaining power of key suppliers.

Question

Quizplus · Accepted Answer

Being the overall low-cost provider in an industry allows the firm to offer products at lower prices than competitors, which can attract price-sensitive customers. By setting the floor on market price, the firm can still earn a profit even while offering lower prices. This can give the firm a competitive advantage in the industry.

Being the Overall Low-Cost Provider in an Industry Has the Attractive