Second, managers are under pressure to deliver as their pay would be directly affected by any performance below expectations. In order to be more competitive and have their portfolios generate greater profits, managers may make riskier decisions. The hedge fund fee incentive system can encourage managers to select investments that are more risky. This could have positive or negative effects depending on the outcome of the investment. It is important to be able to manufacture goods or provide services cheaper than your competitors. By doing so, you can gain market share by offering lower priced products. The ability of companies to lower the price for their products or services gives them an edge over competitors.
I consider this to be one of the best strategies to ensure the success of a firm in the future. They can offer high-quality products and services for lower prices than competitors. It can also help to build customer loyalty and attract new clients who are drawn by cheaper alternatives. Cost leadership also allows businesses to increase profits because they can have a wider customer base willing to buy their products and services, without having to sacrifice too much profit margin.
In general, I believe that this corporation made a wise decision by choosing cost leadership to be their business strategy. It allows them to remain competitive on a market in constant flux while providing great customer service and value. It can also open the door to new opportunities in terms of expanding into other markets.