The cost position of the company has developed over the time of its operations due to the internal as well as the external factors that include the demand for automobiles and how much the customers are willing to pay for them in the market. The changing requirements of the customers for cheaper and more affordable cars that provided high mileage increased in the 1970s in theUSautomobile industry and this impacted the cost bearing capability of the automobile manufacturers.
These manufacturers in turn started purchasing the components at cheaper costs. This meant that companies like the Bridgeton Industries that were in the business of making components and parts for the big three manufacturers in the United States in the 1970s and 1980s were faced with the challenge of reducing their cost of production and operations in order to be more affective. The strategy was adopted by the Bridgeton Industries to reduce the value and the volume of the overheads that existed for the manufacture of the product lines of fuel tanks, exhaust manifolds, doors, mufflers and exhausts as well as oil plans in order to reduce the costs associated with operations. This strategy was focused on reducing the cost in order to increase the margin on the sales made to the big three automobile manufacturers in the market for increased profitability to sustain operations of the Bridgeton Industries