TOPIC 5 - COST

Which of the following best describes a low-cost provider?

• A company that offers premium services at high prices.

• A company that provides products or services at the lowest possible cost to customers.

• A business that focuses on luxury and exclusivity.

• A provider that offers customized solutions at premium rates.

One of the key strategies of a low-cost provider is ________.

• Differentiating through premium features

• Reducing operational costs to offer lower prices

• Increasing advertising spending

• Expanding product range without cost control

Which of the following industries is most likely to have low-cost providers?

• Luxury fashion brands

• High-end automotive manufacturers

• Custom jewelry designers

• Budget airlines

Focused Differentiation strategy primarily aims to ________.

• Serve a broad market with low-cost products

• Minimize costs across all market segments

• Serve a niche market with highly differentiated products

• Offer generic products to the mass market

Which of the following is an example of a company using a Broad Differentiation strategy?

• A luxury car brand targeting high-income customers worldwide

• A local bakery serving only its neighborhood

• A discount store selling low-cost household items

• A company producing generic pharmaceuticals

Focused Differentiation can be advantageous when ______.

• The company wants to compete on price in a large market

• The company aims to offer the lowest possible prices across all segments

• The market is highly commoditized with little differentiation

• The company wants to serve a niche with specific needs and preferences

A company that sells specialized organic skincare products exclusively to eco-conscious consumers is employing which strategy?

• Broad Differentiation

• Cost Leadership

• Focused Differentiation

• Diversification

Which strategy is most likely to be used by a low-cost provider?

• Heavy advertising to build brand loyalty

• Economies of scale to reduce production costs

• Focus on product innovation and differentiation

• Premium pricing to reflect high quality

Which of the following best describes a key difference between low-cost and best-cost strategies?

• Low-cost strategies focus on innovation, while best-cost strategies focus on price

• Both strategies aim to offer the highest quality at the highest price

• Best-cost providers only operate in luxury markets

• Low-cost strategies prioritize minimizing costs; best-cost strategies aim for a balance of cost and quality

A best-cost provider aims to ______.

• Offer the lowest possible price by cutting costs
  

• Provide the highest quality regardless of cost

• Deliver good quality products at a competitive price

• Focus exclusively on luxury and exclusivity