Unit 2 Value Added / Competitive Advantage

Question 1

advantage for cost advantage

Answer 1

smaller companies simply cannot compete on cost so their market share is there for the taking

Question 2

disadvantage for cost advantage

Answer 2

profits may be reduced if prices are also lowered

Question 3

advantage for differentiation (strong brand)

Answer 3

may not require much additional expenditure or price cutting

Question 4

Disadvantage for differentation (strong brand)

Answer 4

May require a longer period of time to achieve than other methods such as cost advantage