In markets where customers are sensitive to price and where internal efficiencies lead to cost advantages allowing for acceptable margins even with aggressive pricing, a ________ strategy can create a powerful barrier to market entry for other firms.
Business · High School · Mon Jan 18 2021
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In markets where customers are sensitive to price and where internal efficiencies lead to cost advantages allowing for acceptable margins even with aggressive pricing, a cost leadership strategy can create a powerful barrier to market entry for other firms.
A cost leadership strategy involves becoming the lowest-cost producer in the industry. By minimizing costs, a company can offer lower prices to customers, which can be a significant competitive advantage, particularly in price-sensitive markets. This cost advantage can act as a barrier to entry for new competitors who may find it challenging to match the low prices while maintaining profitability.