A Trade-Off Analysis between Cost Reduction and Product Differentiation for Sustained Competitive Advantage

5 Pages Posted: 23 Jun 2011  

Vichet Sum

University of Maryland Eastern Shore - School of Business and Technology

Date Written: March 2011

Abstract

The purpose of the current study is to explore various factors influencing managerial decision between cost reduction and product differentiation. A multiple logistic regression model is constructed to determine the likelihood of managerial tendency toward cost reduction or product differentiation. The RHS variables in the logistic regression model include age of process, complexity of process, stage of product life cycle, product portfolio, market share, and competitive nature (bargaining power of suppliers, new entrants, substitute products, and buyer power). Data obtained from online survey of production managers will be analyzed.

Keywords: Cost Reduction, Differentiation, Sustained Competitive Advantage

JEL Classification: L11, L22, L23

Suggested Citation

Sum, Vichet, A Trade-Off Analysis between Cost Reduction and Product Differentiation for Sustained Competitive Advantage (March 2011). Available at SSRN: https://ssrn.com/abstract=1867905 or http://dx.doi.org/10.2139/ssrn.1867905

Vichet Sum (Contact Author)

University of Maryland Eastern Shore - School of Business and Technology ( email )

2105 Kiah Hall
Princess Anne, MD 21853
United States
410-651-6531 (Phone)
410-651-6529 (Fax)

HOME PAGE: http://www.umes.edu/bma/Sum.html

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