ACCA Strategic Business Leader (SBL) Practice Exam

Which approach is essential for businesses that prioritize cost control?

1. Luxury branding strategy

2. Value-added service strategy

3. No frills strategy

4. Quality-first strategy

The correct answer is: No frills strategy

The approach that is essential for businesses prioritizing cost control is the no-frills strategy. This strategy focuses on providing basic products or services without any additional features or enhancements that could increase costs. By eliminating unnecessary expenses and concentrating on the core offering, businesses can keep their prices competitive and provide value to cost-conscious customers. In a no-frills approach, companies often streamline their operations and reduce overhead, which contributes to maintaining low prices. This is particularly vital in highly competitive markets where customers may be more price-sensitive. Businesses utilizing this strategy typically emphasize efficiency and simplicity, ensuring that they meet customer needs without incurring extra costs. In contrast, luxury branding and value-added service strategies involve elements that inherently drive up costs. A luxury branding strategy focuses on high-quality materials, exclusivity, and premium pricing, which does not align with cost control priorities. Similarly, a value-added service strategy enhances the product or service offering, which can also increase costs. The quality-first strategy, while aiming for high standards, may not necessarily prioritize cost control either, as it might require substantial investment in materials and processes.