A cost-leadership strategy works well when:

Question

Quizplus · Accepted Answer

A cost-leadership strategy is effective when buyers are sensitive to price changes, the products are commodity products, and the company can achieve savings from economies of scale. By keeping prices low, the company can attract price-sensitive customers and potentially drive competitors out of the market. Any one of these factors may not be enough to make a cost-leadership strategy successful, but the combination of all three can create a strong competitive advantage.

A Cost-Leadership Strategy Works Well When