Question: competitive strategy.

May we have a discussion on interpreting some key words. According to CFAI answer: state-of-the-art facility implies that a company will want to pursue a cost-leadership strategy. How could this be true? My basic instinct is to select differentiation focus when I see this key word. Isn’t the case that better machine enable us to do things better than anybody else? Or we should focus more on location? Since semi-industry in Taiwan and other Asia countries are mostly compete on price, we should just choose cost-leadership based on real world experience? Anyway, really confused here.

state of the art facility implies low costs and long runs (but like all these answers, i’m reading that into it). a differentiator doesn’t necessarily need a state of the art facility. but they could have one (as per your thought)… not sure that helps.

I would think economies of scale with state-of-the-art facility or equipment/machinery. That leads to cheaper cost/unit of production, hence, cost leadership within industry.

if the question is pointing to differentiation it will need to state HOW the company is differentiating itself. Just saying state of the art facility is too general.

if it is able to price its chips/widgets higher than its competitors, then it is trying to differentiate. otherwise, the state of the art facilities is helping it achieve cost efficiencies. eg Apple?. it may have a state of the art fab lab ,but is also able to charge higher