Answer:
Cost advantage.
Explanation:
In this scenario, the owners of Carpo Inc., a watch company, also own a steel company and a leather goods manufacturing company. This relieves them from expenses that they would have to bear, if they had to rely on outside sources for the raw materials needed to make their watches. This enables the company to produce watches at a much lesser cost than other companies in the industry. This scenario best illustrates a cost advantage.
Cost advantage can be defined as the factors, benefits or edge which an organization has to produce its goods and services at a cheaper rate and better quality, over its competitors or rivals in the same industry. Some of these factors include availability of raw materials, branding, skillful workforce, intellectual property, quality distribution channels, favorable location, great customer services, superior technology, etc.
The scenario involving owners of Carpo Inc. best illustrates Cost advantage.
Cost advantage is achieved when a company produce/offer a product or service at a lower cost than its competitors.
Here, the owners of Carpo Inc. produces watch and also own a steel company and leather goods manufacturing company.
His companies put him at cost advantage over other watch producer because the raw-material to be use in production of the watches are produced by other companies.
Therefore, the scenario involving owners of Carpo Inc. best illustrates Cost advantage.
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