Firms that charge relatively low prices and offer substantial differentiation ar
ID: 347962 • Letter: F
Question
Firms that charge relatively low prices and offer substantial differentiation are following a best-cost strategy. A best cost strategy can be an effective level strategy to the extent that a firm whose fixed costs and overhead are very low relative to the competition. What is an example of an industry where you think a best-cost strategy could be successful? How would you differentiate a company to achieve this success in this industry? Provide an example of a firm in Jacksonville that is following a best cost strategy? Explain.
Explanation / Answer
A Best Cost Strategy of a company simply means to offer differentiated products to the customers at reasonably low prices. Many companies are following this strategy to retain their customers for long period of time and to gain greater market share.
An Apparel (clothing) Industry is the best example where the best cost strategy would succeed. In order to differentiate with the competitors and be successful in Apparel Industry, a company may provide its customers with highly fashionable and designed clothes bought from various top brands and that too at affordable prices.
For example, Marcus Lemonis Fashion Group situated in Jacksonville offers wide variety of top brands clothing at reasonable prices to the customers. The company has been greatly successful in building a reputed image among the customers due to its differentiated and low cost strategy along with providing finest services to the customers.
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