Business & Finance homework help| Business & Finance homework help
This fee structure also puts pressure on managers because any performance that is below their expectations would result in a decrease in compensation. In order to differentiate their portfolios from others and make higher profits, managers may take more risk in order that their rewards are greater. Overall, hedge fund managers are encouraged to take greater risk in selecting investments. These decisions can have either positive or negative outcomes depending on whether they pay off. The ability to manufacture goods and services at lower prices than their competitors is cost leadership. This allows them to increase market share by offering lower prices. Companies can gain an edge over competitors by offering lower prices on their products or services.
This strategy, I think, is crucial to the company’s long-term success. It gives the company a competitive advantage by offering quality services and products at a lower price than others in their industry. Customers will be more loyal to this strategy, and they may choose cheaper alternatives over the better-priced ones. Companies can also maximize their profits with cost leadership by attracting more customers who will buy their products or services.
Overall I believe that cost leadership was the right business strategy for this corporation. This allows them to remain competitive in changing markets while also providing great customer experience and value for their money. It can also open doors to new markets, if executed correctly.