Which of the following is a risk a company takes when building a strategy around the experience curve?
A) Competitors will likely not be able to meet the company's price cuts.
B) Existing technologies are likely to become more expensive as the company expands.
C) The method does not take competitors' prices into account.
D) The method may cause consumers to become frustrated with changing prices.
E) Aggressive pricing may give the product a cheap image, causing customers to lose interest.

Question

Which of the following is a risk a company takes when building a strategy around the experience curve?
A)	Competitors will likely not be able to meet the company's price cuts.
B)	Existing technologies are likely to become more expensive as the company expands.
C)	The method does not take competitors' prices into account.
D)	The method may cause consumers to become frustrated with changing prices.
E)	Aggressive pricing may give the product a cheap image, causing customers to lose interest.

Quizplus · Accepted Answer

The experience curve strategy, which involves lowering prices as production efficiency increases, can indeed risk giving a product a cheap image if prices are cut too aggressively. This can lead consumers to perceive the product as lower quality or less desirable, potentially leading to a loss of interest.

Which of the Following Is a Risk a Company Takes