4.5. One way of thinking about nizing to implement cost leaders strategies is that firms pursuing strategy should be highly central have high levels of direct superv sion, and keep employee wages t absolute minimum. Another app: is to decentralize decision-making authority-to ensure that individ

-.3. A firm may choose a strategy of most leadership in an industry where customers are very price insensitive, e.g., in luxury goods. Given that most competitors will focus on differentiat- ing their products in such an industry, is cost leadership a poor choice? What can a cost leadership strategy hope to achieve in such an industry? who know the most about reducing costs make decisions about how to reduce costs. This, in turn, would imply less direct supervision and somewhat higher levels of employee wages. Why is this? 4.4. When firms do engage in "forward pricing" what risks, if any, do they face? 4.5. One way of thinking about orga- nizing to implement cost leadership strategies is that firms pursuing this of strategy should be highly centralized, sic. have high levels of direct supervi- -ure sion, and keep employee wages to an nies absolute minimum. Another approach is to decentralize decision-making authority-to ensure that individuals 4.6. Economies of scale and differential low-cost access to productive inputs are two drivers of cost leadership. Are these two factors related? 4.7. Often, the first step in determin- ing if cost leadership is a feasible strategy for a company is to analyze the costs of key activities (e.g., using the value chain tool) relative to com- petitors. However, many companies increasingly outsource some of their value added activities to temporary workforces. How would you modify the value chain approach to support this cost analysis? me of