Question

Explain business-level strategies? What is your understanding of Strategic Trade-offs? Explain how the economics of scale and learning-curve effects helps to keep the cost low.

Answer 1

Business level strategy:

It is the strategy on how the business intends to compete in individual product markets by committing itself to gain competitive advantages in the specific product markets.

Strategic trade-off means leaving behind or sacrificing a niche set of consumers by a brand to stay on its positioning.

Learning curve effect means the same amount of output device fewer hours overtime.

Economics of scale means the average cost of production of goods and services coming down as the scale of operation increases.

As firm achieves Learning curve it requires less time, which saves labour hours & Economic of scale ensure the average cost reduces.