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CS Professional · Strategic Management and Corporate Finance · Business Policy and Formulation of Functional Strategy

Sundaram Foods Ltd follows a cost leadership strategy at the business level. Which functional-level choice is most consistent with it?

For a firm following cost leadership, the consistent functional strategy is a production approach with high-volume efficient plants and standardised products. This lowers unit cost. Premium pricing, costly customisation and design-led hiring suit differentiation and would undermine the cost advantage.

  1. AProduction strategy that invests in high-volume, efficient plants and standardised productsCorrect
  2. BMarketing strategy built around premium pricing and exclusive outlets
  3. CHR strategy that hires only for creative design skills regardless of cost
  4. DR&D strategy that focuses on frequent, costly customised product launches

Explanation

Cost leadership depends on scale, efficiency and standardisation, so a high-volume efficient production strategy fits. The other options suit differentiation or premium positioning and would raise cost, working against the business strategy.

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