Question

Wesker plc manufactures a wide range of food products in a highly competitive market. It has set up its production facilities so that they achieve economies of scale the primary objective of its operations is the constant improvement of productivity.

In terms of Porter’s generic competitive strategies, Wesker plc’s strategy is

A. Differentiation

B. Differentiation focus

C. Cost focus

D. Cost leadership

Answer 1

D. Cost leadership

 

 

EXPLANATION

A company that practices cost leadership strives to be the lowest-cost manufacturer in its sector. Cost Leadership is a type of competitive strategy in which an organization actively seeks out effective large-scale production facilities, reduces costs, utilizes economies of scale, gains production experience, and employs strict cost controls to be more efficient in the production of products or the offering of services than competitors: the objective is to be the low-cost producer in the industry. A low-cost position also means that a business may offer equivalent quality at fair profits by undercutting competitors' costs, for instance through penetration pricing. Low-cost producers often market generic goods and services.

D. Cost leadership