Respuesta :
Answer:
It must reduce the firm's costs below that of its competitors while offering superior value.
Explanation:
Cost Leadership is the mechanism of establishing a competitive advantage by having the lowest cost of operation in the industry. This strategy is especially beneficial in a market where the price is an important factor.
Cost Leadership strategy: Increasing profits by reducing costs, while charging industry-average prices. Increasing market share through charging lower prices, while still making a reasonable profit on each sale because you've reduced costs.
As opposed to offering superior products or brand appeal, a cost-leadership company's greatest value to consumers tends to be low pricing. Therefore, if a competitor can reduce costs more, it will pose a substantial threat to a company's consumer base.
