A company\'s managers should probably give serious consideration to changing fro

Question

A company's managers should probably give serious consideration to changing from a low-cost/low price strategy for entry-level cameras to a different strategy when the company's costs of producing and marketing entry-level cameras are above the industry-averages for many/most of the benchmarked cost categories reported on pp. 5-6 of the GSR and thus are unlikely to be competitive with other rivals that are charging low prices for entry-level cameras and are apparently pursuing a low-cost, low-price strategy. the number of PATs a company employees are NOT well above the industry-average (as reported in the bottom section of p.5 of the most recent GSR). most rival companies charging below-average prices for entry-level cameras are spending above-average amounts on quarterly advertising and have 90-day warranties on their entry-level cameras. company managers prefer that their company's total annual compensation per PAT member (as reported in the bottom section of p. 5 of the GSR) be above the industry-average in order to achieve high levels of PAT productivity. when they prefer not to spend the capital required to invest in robotic assembly equipment that cuts the number of PATs needed to assemble cameras and lowers labor costs per camera assembled at the company's Taiwan plant.

Explanation / Answer

Option A is correct because consumers will switch to rival sellers when they are selling cheap and firm's profits will decline.

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