Question

Which of the following statements about companies that adopt a differentiation strategy is true?

a.They concentrate on developing large quantities of the same product, thereby providing cost advantages to their customers.
b.Their focus is on being as efficient as they can be.
c.They are more likely to take a mechanistic approach to organizational design.
d.They rely on selling products at the lowest possible cost.
e.Their product is likely of high quality or has unique features.

Answer 1

Companies that adopt a differentiation strategy focus on making their products stand out through high quality or unique features, thereby adding value and potentially commanding premium prices.

Step-by-step explanation:

A company that adopts a differentiation strategy is one that aims to make its products stand out from the competition through unique features. These unique features can include the physical aspects of the product, location from which the product is sold, intangible aspects such as brand image or customer service, and overall perceptions of the product. The correct answer to which statement is true about companies that adopt a differentiation strategy is 'e. Their product is likely of high quality or has unique features.'

By focusing on building distinctive products, businesses can develop a strong competitive edge, often allowing them to charge premium prices. Differentiation does not typically focus on mass production of identical products or solely on being the most efficient producer; instead, it emphasizes the difference and added value that the products provide to consumers. Such companies may work towards efficiency but within the context of enhancing their unique product offerings rather than just minimizing costs.