Question

How can companies use costs to remain competitive?

Answer 1

Companies can get to use the cost of sale to remain competitive in the market and for instance it can be mentioned that increasing cause of cell by using technique such as promotions advertisements etc can get to increase the costs but they get to rope in more customers with which they remain competitive in the market. another way of using costs to remain competitive in the market is cost cutting method where the managers try to cut their costs that can ultimately have a effect on the price that can stimulate more demand. For instance If a company is variable cost is very high then the company can employ better machinery that can reduce the variable cost and this allows that to deliver at a lower price which triggers competition.