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 a 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 puts a firm in a position to win the business of price-sensitive customers, set the floor on market price, and still earn a profit. This is because customers who are price sensitive will choose the low-cost provider over competitors, and the company can still maintain profitability by having lower costs than competitors.

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