Student Discussion Topic: Sources of Cost Advantage
There are five sources of cost advantage but one that stands out to me is proprietary knowledge. I think proprietary knowledge brings value and affects a company’s strategy by breaking down each department and associating each step to the ultimate objective. As a company, you want to know every step in making the product because in each step the company has the ability to lower cost and have an affect in production. In each step the process can be conjoined or needs to be broken down smaller to have the desired product. Proprietary knowledge should be aligned with the company’s strategy to be efficient and cost effective. Thoughts?
There are at least five sources of cost advantage that an organization can use to become the lowest cost producer in the industry it operates. The five sources include economies of scale or scope, learning and experience or economies of learning,