Consider the following series of independent situations in which a firm is about to make a strategic decision.
a. Pedro Phones is about to decide whether to launch production and sale of a cell phone with standard features.
b. Flash Computers is trying to decide whether to produce and sell a new home computer software package that includes the ability to interface with a sewing machine and a vacuum cleaner. There is no such soft-ware currently on the market.
c. Celine Cosmetics has been asked to provide a “store brand” lip gloss that will be sold at discount retail stores.
d. Nicholus Meats is considering developing a special line of gourmet bologna made with sun-driedtomatoes, pine nuts, and artichoke hearts.
1. For each decision, state whether the company is following a cost leadership or a product differentiation strategy.
2. For each decision, discuss what information the management accountant can provide about the source of competitive advantage for these firms.