Which of the following is true of the cost leadership strategy?Group of answer choicesIt requires a company to be good at curtailing costsIt requires small businesses to position themselves only in high-cost areas.It requires a company to be the highest cost producer in its competitive environment.It recommends pricing products high if price is a major driver of customer value

To determine which statement is true about the cost leadership strategy, let's analyze each option step by step:

1. "It requires a company to be good at curtailing costs"

   • Cost leadership strategy focuses on becoming the lowest cost producer in the industry. This involves minimizing costs in various areas such as production, distribution, and marketing. Therefore, being good at curtailing costs is essential for this strategy.

2. "It requires small businesses to position themselves only in high-cost areas."

   • This statement is not accurate. Cost leadership strategy does not dictate that businesses, whether small or large, should position themselves in high-cost areas. Instead, it emphasizes reducing costs to offer competitive pricing.

3. "It requires a company to be the highest cost producer in its competitive environment."

   • This statement is incorrect. The goal of a cost leadership strategy is to be the lowest cost producer, not the highest.

4. "It recommends pricing products high if price is a major driver of customer value."

   • This statement contradicts the essence of cost leadership. The strategy aims to offer products at lower prices to attract price-sensitive customers, not to price products high.

Based on the analysis, the correct statement is:

"It requires a company to be good at curtailing costs."