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Up1
Which of the following statements related to the cost leadership strategy is/are accurate?
I. The cost leadership strategy is used to decrease production costs.
II. The cost leadership strategy is used to increase sales.- A. I only
- B. II only
- C. Both I & II
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Up1
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.
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