Which type of business strategy is most closely associated with a company that implements tight cost controls?

• A. Market penetration strategy
• B. Low-cost leadership strategy
• C. Focus strategy
• D. Differentiation strategy

Answer: (B)

Verified step by step guidance

1. Understand the concept of business strategies in microeconomics, which are approaches companies use to gain competitive advantage in the market.
2. Recognize that a company implementing tight cost controls aims to minimize expenses to offer products or services at lower prices than competitors.
3. Recall that the Low-cost leadership strategy focuses on becoming the lowest-cost producer in the industry, often through efficient operations and cost control.
4. Compare this with other strategies: Market penetration focuses on increasing market share, Focus strategy targets a specific market segment, and Differentiation strategy emphasizes unique product features rather than cost.
5. Conclude that the strategy most closely associated with tight cost controls is the Low-cost leadership strategy because it directly involves minimizing costs to compete on price.