What is required along with higher value to deliver a competitive advantage, as indicated in strategic trade-offs?

The correct choice highlights that achieving a competitive advantage often involves balancing higher value offerings with the associated higher costs. Strategic trade-offs refer to the decisions organizations make about where to allocate resources and how to position themselves in the market. When businesses aim to provide significantly greater value to customers—such as through enhanced features or superior quality—they typically incur higher costs in production, R&D, or customer service.

This relationship emphasizes that merely increasing value is not enough; organizations must also consider the financial implications of their strategies. Delivering higher value without understanding the cost structure can jeopardize profitability. Therefore, the ability to manage these higher costs while still offering superior value is crucial for sustaining a competitive advantage.

For example, a company like Apple invests considerably in design and technology, leading to higher production costs. However, this investment translates into a differentiated product that consumers perceive as high value, enabling the company to command premium pricing in the market. This scenario illustrates how higher costs can accompany efforts to deliver higher value, thereby reinforcing the link between the two in strategic management.