Which of the following is NOT one of the pitfalls of a low-cost provider strategy?
A) overly aggressive price-cutting
B) setting the industry's price ceiling to capture volume gains and achieve economies of scale
C) relying on an approach to reduce costs that can be easily copied
D) becoming too fixated on cost reduction
E) having the basis for the firm's cost advantage undermined by cost-saving technological breakthroughs that can be readily adopted by rival firms

Question

Quizplus · Accepted Answer

Setting the industry's price ceiling to capture volume gains and achieve economies of scale is actually a potential advantage of a low-cost provider strategy rather than a pitfall. It can allow the firm to gain a larger market share and benefit from economies of scale, which can further reduce costs and improve profitability. The other options listed are all potential pitfalls of a low-cost provider strategy.

Which of the Following Is NOT One of the Pitfalls