Cost leadership is a sustainable source of competitive advantage only if barriers exist that prevents competitors from achieving the same low costs.

Question

Quizplus · Accepted Answer

Cost leadership is a sustainable source of competitive advantage only if competitors cannot imitate the low cost structure. This can be achieved through various barriers such as economies of scale, proprietary technology, access to cheaper raw materials, or favorable government policies. Without these barriers, competitors can easily replicate the cost advantage and erode the profitability of the firm.

Cost Leadership Is a Sustainable Source of Competitive Advantage Only