MGT 487 Homework 4 - QUESTIONS WITH ANSWERS (ALL CORRECT)

Homework 4 1. Discuss the risks associated with each of these forms of competitive advantage: overall cost leadership, differentiation, and focus.  Overall leadership: overall leadership is based on creating low-cost position relative to a firm’s competitors and managing relationships throughout the entire value chain to lower their costs. The downfalls of being a cost leader is too much focus on one or a few value chain activities. Being cost leader means increase in cost of the inputs, strategy is limited too easily, lack of parity on differentiation, reduced flexibility, and undesirability of the basis of cost advantage.  Differentiation: differentiation related to products/services that are unique and values compared to competitors. Differentiated products