A competitive strategy to be the low-cost provider in an industry works well when
A) price competition among rival sellers is especially vigorous.
B) commodity-based product prevails and minimal differentiation exists.
C) buyers incur low costs in switching their purchases from one seller or brand to another.
D) industry newcomers use low introductory prices to attract buyers and build a customer base.
E) All of these choices are correct.

Question

Quizplus · Accepted Answer

A low-cost provider strategy works well when: (1) industry newcomers use low introductory price to attract buyers and build a customer base,(2) the products of rival sellers are essentially identical and/or are readily available from several sellers,(3) commodity-like products and/or ample supplies set the stage for lively price competition,and (4) buyers incur low costs in switching from one seller/brand to another.In such markets,it is the less efficient,higher-cost companies that are most vulnerable.

A Competitive Strategy to Be the Low-Cost Provider in an Industry