A company stands a better chance of achieving a sustainable cost-based competiti

Question

A company stands a better chance of achieving a sustainable cost-based competitive advantage over rivals if its managers o elect to pursue most all of the available cost-reducing initiatives and succeed in driving down o elect to produce and market branded footwear with no higher than a 4-star SIQ rating (to costs per pair sold by sizable amounts, while those rivals also striving to win a low-cost advantage-for any of many possible reasons-fall short of achieving matching cost reductions conserve on production costs), choose not to offer free shipping to Internet customers, and do not overspend on TQM/Six Sigma programs, best practices training for plant employees advertising, and celebrity endorsements o keep capital investments to a bare minimum (so as to enable the company to have lower depreciation costs than rivals), spend small amounts on TQM/Six Sigma programs (because the benefits of these programs are limited and will not drive down manufacturing costs per pair very much), avoid overpaying plant employees, and avoid overspending on advertising make sure the company has at least 2 million pairs of plant capacity in every geographic region (in order to minimize tariff payments and avoid unfavorable exchange rate impacts) and are aggressive in undercutting the Internet and wholesale prices for branded footwear of rival firms in each geographic region control production-run setup costs by producing no more than 200 models/styles of branded footwear, strive to operate all plants at full production capacity every year, and bid aggressively to win contracts for celebrity endorsements (because having high celebrity appeal ratings in each geographic region is the most powerful and cheapest way for a company to sell all the branded pairs it can produce) 3 Copying redistributing or wer site posting is expressly prohibited and co

Explanation / Answer

A company stands a better chance of achieveing a sustainable cost based competitive advantage over rivals if its managers

Ans:: Elect to pursue most all of the available cost - reducing initiatives and succeed in driving down costs per pair sold by sizable amounts, while those rivals also striving to win a low-cost- advantage fall short of achieving matching cost reductions

Reducing costs is very important to offer a better price to customers. Price plays an important role in purchase decisions and company's pricing depends on costs too. When managers are able to reduce costs considerably we can offer least price in the market and still be profitable. Owing to the high costs , our rivals wouldn't be able to price low.

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