Final answer:
Differentiation is the strategy that gives a company a sustainable competitive advantage by making its products appear distinct from those of its competitors, often through unique features, brand reputation, and customer perceptions.
Step-by-step explanation:
The strategy that distinguishes a company from its rivals and provides a sustainable competitive advantage is C. Differentiation. Differentiation is a key business strategy, involving any action that firms undertake to make consumers believe their products are distinct from their competitors'. This can be achieved through various means such as the physical aspects of the product, location from which the product is sold, intangible aspects like brand reputation, and overall perceptions of the product.
Products that are distinctive in these ways are termed differentiated products. Differentiation can contribute to a well-respected brand name and create barriers to entry for new competitors, which is evident in cases where economies of scale are small relative to market size and where companies have a reputation for slashing prices in response to new entries. Another successful strategy that businesses often employ is focus, which involves concentrating on a core set of products or services rather than offering a wide range without clear differentiation.