Question

Which of the following is a risk of cost leadership strategy?
Select one:

a.
Competitor imitation

b.
Increases in R&D costs

c.
Changing consumer tastes

d.
Increases in differential costs

Answer 1

Answer:

Changing consumer tastes

Answer 2

The risk is of Increases in the R&D costs

• This strategy entails allocating all of your resources to the production of commodities at a minimal feasible cost.
• Buyers are turned off by the absence of creativity or new things in this strategy.
• In order for a firm to deliver new goods or improvements to old ones, it must invest in research and development.
• These extra expenditures should be avoided for the low-cost strategist; as a result, the delay in innovation has a negative impact on customers who want the improvements.