Cost Strategy (Low Cost Production)

The video discusses a cost-based competitive strategy, focusing on establishing a lower cost base to gain an advantage in the marketplace. It explains how having a lower production cost than competitors can lead to higher profit margins, which serve as a competitive advantage. The video also explores various sources of low cost advantages, such as access to unique suppliers or advanced technology, and concludes with a summary of the cost-based strategy approach.

What is the primary focus of a cost-based competitive strategy?

• Reducing the cost for customers

• Lowering the production cost for the producer

• Enhancing product quality

• Increasing the selling price

How does a lower cost structure benefit a company in the marketplace?

• By increasing the number of products

• By reducing the need for marketing

• By achieving higher profit margins

• By expanding the customer base

Which of the following can contribute to a lower cost of production?

• Increased advertising costs

• Access to exclusive suppliers

• Higher employee wages

• More expensive raw materials

What role does technology play in a cost-based competitive strategy?

• It enables production at a lower cost

• It reduces the need for skilled labor

• It increases the complexity of production

• It allows for higher production costs

What is the main takeaway of a cost-based approach in competitive strategy?

• It prioritizes product innovation

• It targets market expansion

• It emphasizes a lower cost of production

• It focuses on customer satisfaction