A Trade-Off Analysis between Cost Reduction and Product Differentiation for Sustained Competitive Advantage
5 Pages Posted: 23 Jun 2011
Date Written: March 2011
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
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