A competitive strategy predicated on low-cost leadership tends to work best when
A) there are widely varying needs and preferences among the various buyers of the product or service.
B) there are many market segments and market niches, such that it is feasible for a low-cost leader to dominate the niche where buyers want a budget-priced product.
C) price competition is especially vigorous and the offerings of rival firms are essentially identical, standardized, commodity-like products.
D) buyers prefer that the products/services of competing sellers have widely varying attributes and prices.
E) buyers have high switching costs and there is considerable diversity in how buyers use the product.

Question

Quizplus · Accepted Answer

A low-cost leadership strategy is most effective when there is intense price competition and commodity-like products because the low-cost leader can offer the lowest price and still make a profit. In situations where there are widely varying needs and preferences among buyers or high switching costs, other competitive strategies may be more effective. While there may be multiple market segments and niches, the low-cost leader may not necessarily be able to dominate all of them.

A Competitive Strategy Predicated on Low-Cost Leadership Tends to Work