A firm's strategic profile based on value creation and cost is called its strategic position.
What is strategic position?
- A company's strategic positioning reflects the choices it takes about the kind of value it will create and how it will do it differently from rivals.
- Strategic positioning should either result in higher pricing or lower costs. The strategist's responsibility is to create better performance within a particular sector.
- Strategists strive to shift relative price or relative cost in the company's advantage in order to obtain a competitive edge.
- For instance, Coca-Cola prefers not to compete for the same target demographic but instead promotes Powerade as a less expensive alternative to Pepsi's Gatorade in the sports drink industry. Customers who buy Gatorade are prepared to shell out extra money for an expensive sports beverage.
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