Question

Samantha is a senior IS a manager for a lighting design company. She decides to invest in an information system that will reduce subcontractor labor costs for her organization by facilitating the relocation of tools and materials to more optimal locations while rearranging workflows. What business strategy does this represent?

Answer 1

The cost leadership business strategy represents Samantha's actions in investing in an information system that will reduce the costs of subcontracted labor for her organization.

Cost leadership

It is a strategy used with the objective of having the lowest cost in the market. Companies use it with the aim of gaining greater competitiveness and increasing market positioning.

Despite the advantages, cost leadership can be a difficult strategy to implement, since reduced costs are not only inherent to a product, but to the entire company's portfolio, in addition to its structure and supply chain.

Therefore, in order to maintain the strategy, it is necessary for the organization to achieve economies of scale, for the apportionment of fixed costs and expenses.

The correct answer is:

• Cost leadership

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