Read the overview below and complete the activities that follow. For a company to do a more cost-effective job of managing its value chain than rivals, managers must diligently search out cost-saving opportunities in every part of the value chain. No activity can escape cost-saving scrutiny, and all company personnel must be expected to use their talents and ingenuity to come up with innovative and effective ways to keep down costs. Particular attention must be paid to a set of factors known as cost drivers that have a strong effect on a company's costs and can be used as levers to lower costs. Figure 5.2 shows the most important cost drivers. FIGIIRF 52 Cnst Drivars. The Kave ta Drivina Down Comnanv C.ncte Source: Adapted from Michael E. Porter, Competitve Advantage: Creating and Sustaining Supenior Pertormance (New York: Free Press, 1985). Examples of a way a company can lower its costs by revamping its value chain do not include Multiple Choice selling direct to consumers and bypassing the activities and costs of distributors and dealers. streamlining activities by eliminating low value added or unnecessary work steps and activities. reducing materials handling and shipping costs by having suppliers located close to the company's production facilities. motivating employees through incentives and company culture. changing production activities that create high value and added work steps