Achieving a cost advantage over its rivals entails
A)concentrating on the primary activities portion of the value chain and outsourcing all support activities.
B)being a first mover in pursuing backward and forward integration,and controlling as much of the industry value chain as possible.
C)performing value chain activities more cost-effectively than its rivals and finding ways to eliminate or bypass some cost-producing activities.
D)minimizing R&D expenses and paying below-average wages and salaries to conserve on labor costs.
E)producing a standard product,redesigning the product infrequently,and having minimal advertising.

Question

Quizplus · Accepted Answer

Achieving a cost advantage over its rivals entails performing value chain activities more cost-effectively than its rivals and finding ways to eliminate or bypass some cost-producing activities. This means that the company should focus on cost reduction in primary and support activities, and should identify ways to eliminate or bypass cost-producing activities. Backward and forward integration (B) may increase costs in the short-run, and it may not lead to a sustainable cost advantage. Reducing R&D expenses (D) may negatively impact a company's long-term competitiveness, while producing a standard product and minimal advertising (E) may not provide a significant cost advantage.

Achieving a Cost Advantage Over Its Rivals Entails