Question

How is a cost-leader protected from threats from powerful suppliers? It is able to create a significant difference between perceived value and current market prices. It is more able to absorb price increases through generating higher profit margins. It is able to create a significant difference between actual value and future market prices. It is more able to absorb price increases through accepting lower profit margins.

Answer 1

Answer:

Option B (By embracing lower operating costs it's much more likely to handle price rises) is the correct choice.

Explanation:

• Cost management or leadership seems to be an organizational practice introduced by Michael Porter. This helps build organizational competitive benefits. Price leadership relates to supplying the market with the cheapest operating costs, which varies from the pricing strategy.
• Sometimes it is driven by performance, size, complexity, reach, infrastructure as well as the perspective of the organization.

Some other options given should not be concerning the condition in question. And the correct response would be alternative B.