Low-cost leaders who have the lowest industry costs are likely to
A)pursue backward or forward integration to detour suppliers or buyers with considerable bargaining power and leverage.
B)move the performance of most or all value chain activities to low-wage countries.
C)sell directly to users of their product or service and eliminate the use of wholesale and retail intermediaries.
D)have outmanaged its rivals in finding ways to perform value chain activities more cost-effectively
E)be considering exiting the current product market and using their competitive low-cost strength to gain a competitive advantage in other product arenas.

Question

Quizplus · Accepted Answer

Low-cost leaders achieve their position by finding ways to perform value chain activities more cost-effectively than rivals. This may involve improving production processes, finding cheaper suppliers or raw materials, or reducing overhead costs. Therefore, option D is the most appropriate choice. While options A, B, and C may also be strategies employed by low-cost leaders, they are not necessarily the most common or essential ones. Option E is not a necessary implication of being a low-cost leader.

Low-Cost Leaders Who Have the Lowest Industry Costs Are Likely