4. In topic 4, we discussed cost-leadership as a means of achieving a competitiv

Question

4. In topic 4, we discussed cost-leadership as a means of achieving a competitive advantage. Specifically, the top 10 areas for achieving these efficiencies were presented (see Cost-Efficient Management of the Value Chain discussion beginning on slide #13 of topic 4 PPT). In your opinion of what you now know about cost suppression as a competitive strategic priority, which three (3) of these top 10 are the most important to achieving a cost advantage AND how would a firm implement these efficiencies in a way that makes each one difficult to imitate by competition. Offer separate imitation discussions for each of the 3 initiatives. I do realize that these three discussions might have some ideas/arguments in common. Please feel free to answer (although you are not required to do so) this question from the standpoint of your current firm, the firm for which you worked in the past, and/or the firm you have chosen to analyze for your project.

The 10 areas for these efficiencies are:

1. Striving to capture all available economies of scale

Taking full advantage of learning/exerience curve effects

Trying to operate facilities at full capacity

Pursuing efforts to boost sales volumes and spread R&D and SG&A costs

Improve supply chain efficiency

Substituting the use of low-cost for high-cost raw materials or component parts

Using online systems and software to achieve operating efficiencies

Adopting labor-saving operating methods

Using the company's bargaining powr vis-vis suppuliers to gain concessions

Being alert to cot advantages of outsourcing and vertical integration.

Explanation / Answer

I think that cost leadership is an important aspect for any firm to get competitive advantage and remain relevant in the market. Among the given 10 areas I will choose the following three areas

- Striving to capture all available economies of scale

-Taking full advantage of learning/exerience curve effects

-Being alert to cot advantages of outsourcing and vertical integration.

These three are the best method for cost suppression because by getting economy of scale which all firm won't get the firm will be in the stronger position in the market. Through this revenue can be augmented and cost can be deccelerate. It will be difficult for the competitors to follow this.

Through learning curve, efficiency and productivity can be increased and in lower time more production will be there. This will ultimately increase the revenue and decrease the cost significantly.

The last one is best method in the short term for any firm to attain cost advantage. vertical integration of the process and outsourcing are major key for cost reduction.

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