CFA Level 1 Question of the Week – Equity Investments

The correct answer is C.

Firms engaging in cost-leadership strategy seek to combine low per-unit profit with large sales to make a profit.  Typically, but not always, they tend to market to a large population base or a niche with a high demand volume. Perhaps the most famous cost leader is Wal-Mart, which has used a cost-leadership strategy to become one of the largest companies in the world.