The major avenues for achieving a cost advantage over rivals include
A)performing value chain activities more cost-effectively than rivals or revamping the firm's overall value chain to eliminate or bypass some cost-producing activities.
B)having a management team that is highly skilled in cutting costs.
C)being a first-mover in adopting the latest state-of-the-art technologies, especially those relating to low-cost manufacture.
D)outsourcing high-cost activities to cost-efficient vendors.
E)paying lower wages and salaries than rivals.

Question

Quizplus · Accepted Answer

A cost advantage can be achieved by performing value chain activities more cost-effectively than rivals or revamping the firm's overall value chain to eliminate or bypass some cost-producing activities. This involves reducing costs in the areas of procurement, operations, and distribution, among other things. By doing so, a company can offer lower prices or higher margins than its competitors. The other options may contribute to cost savings, but they are not as effective as the measures outlined in option A.

The Major Avenues for Achieving a Cost Advantage Over Rivals