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From course:

Industrial Strategy 2022

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Question:

Why can quality be difficult to manage at low costs? How does it relate to the cost leadership strategy?

Author: Hjalmer Pedersen



Answer:

Further, it can be difficult to manage quality at low cost: 1. Quality-parity option: provide equivalent quality in terms of product or service features. The cost leader can then charge the same price as rivals and make higher profits (from lower costs) 2. Quality-proximity option: provide slightly lower quality in terms of of product or service features. The cost leader can then offer a slightly lower-than-market price and still make higher profits.


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