In which of the following circumstances is a strategy to be the industry's overall low-cost provider NOT particularly well-matched to the market situation?
A) when the offerings of rival firms are essentially identical and readily available from many eager sellers
B) when there are few ways to achieve differentiation that have value to buyers
C) when price competition among rival sellers is especially vigorous
D) when buyers have widely varying needs and special requirements, and the prices of substitute products are relatively high
E) when the majority of industry sales are made to a few, large-volume buyers

Question

Quizplus · Accepted Answer

Being the low-cost provider is not well-matched to the market situation when buyers have widely varying needs and special requirements because these customers are usually willing to pay a higher price for the specific features they desire. Also, if the prices of substitute products are relatively high, buyers may not be as price-sensitive, making a low-cost strategy less effective. In other circumstances, such as when offerings are identical or when there are few ways to achieve differentiation, a low-cost strategy may be more appropriate. Similarly, when there is vigorous price competition or when sales are made to a few large-volume buyers, a low-cost strategy can be advantageous.

In Which of the Following Circumstances Is a Strategy to Be