The human resource department at Paula's Powerwheels is implementing a number of functional-level strategies. These strategies include focusing on ways to retain and develop a stable workforce and ways to improve efficiency in the organization. These functional-level strategies are consistent with which of the following strategies?

a. Cost leadershipb. Differentiationc. New product developmentd. New market developmente. Divestiture

The correct answer is a. Cost leadership.

Explanation:

The cost leadership strategy consists in obtaining a convenient benefit for the company and moving the profitability of the different market players. It is that strategy with which products similar to those of other companies are offered at a lower cost, that is, a certain company proposes to be the lowest cost producer in its industrial sector in order to achieve a differentiation.

At lower prices than its rivals, the leader's position translates into higher returns, however, standard products should not be sold ignoring the basis of product differentiation itself, since, if the customer does not perceive the product as comparable, The company must set very low prices in relation to the competition to achieve sales.

The sources to obtain this type of advantages are varied and depend on the structure of the industrial sector itself, including economies of scale, the use of proprietary technology, preferential access to the raw material, among others.

The cost leadership strategy aims to make a company the leader, rather than several companies struggling to reach that position, as this implies tough rivalry and competition that can have unfavorable consequences for all.