Question

Sematech is a producer of computer chips. To gain an advantage over other computer chip makers, Sematech focuses on reducing its costs below all of its competitors and has aligned its value chain accordingly. Recently, several of Sematech's competitors have begun to reduce the company's competitive advantage. In response to this threat, Sematech has decided to add production capacity in an effort to lower costs.
Sematech is pursuing which strategy?
A) cost-leadership business strategy
B) product-differentiation business strategy
C) cost-leadership corporate strategy
D) product-differentiation corporate strategy

Answer 1

Answer: A) cost-leadership business strategy

Explanation:

Cost leadership business strategy is a

• strategy of getting a competitive advantage by having the lowest cost of operation in the entire industry.
• makes a reasonable profit on each sale because you've reduced costs.

Here, To gain an advantage over other computer chip makers, Sematech focuses on reducing its costs below all of its competitors .

where as product differentiation is a technique use to differentiate a product from similar offerings on the market.

So, Sematech is pursuing a cost-leadership business strategy.

So, correct option is (A).