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Magic Corporation manufactures water toys. It plans to grow by producing high-quality water toys that are delivered in a timely manner. There are a number of other manufacturers who produce similar water toys. Magic believes that continuously improving its manufacturing processes and re-engineering processes to downsize and eliminate excess capacity are critical to implementing its strategy. Which of the following best describes Magic's strategy?
A) product differentiation
B) product leadership
C) cost differentiation
D) cost leadership

Sagot :

Answer: D. Cost leadership

Explanation:

Magic's strategy in this case is cost leadership. Cost leadership is when a company produces ita product by using the lowest production cost and therefore has a competitive edge towards its rivals.

In a cost leadership strategy, the cost is reduced and the company therefore makes the least expensive goods in the industry and thus gain marhet share.

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