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Dear Professor,
hope you are having a good day!
one of the examples of cost-leadership is “Use of learning effects”
could you possibly explain to me what it means with an example please?
at second,
one of benefit is ” can operate in unattractive segments”
what kind of unattractive segments are they talking about? and how can it be operating well even if it’s not attractive to the business? please kindly share me with an example?
Learning can affect any business. It simply means that repeated practice allows the business to improve processes, make them more efficient and reduce unit time. Learning is most marked in complex operations which are predominately manual. For example, autiting. Doing your 100th audit will be more efficient than your first.
An unattractice sector is one where it is hard to make a reasonable profit. Eg strong competition keeps prices down. To make a better profit costs must be lowered, because it will be difficult to raise prices. The firm with the lowest costs should do best in such a sector.
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