Question

Sony uses a ________ strategy. The firm is constantly on the alert for new product ideas and or ways to extend its current products into new.

1) Product development
2) Market penetration
3) Market development
4) Diversification

Answer 1

Sony adopts a product development strategy focused on innovation and product differentiation, which allows for a competitive edge and potential above-normal profits in the market.

Step-by-step explanation:

Sony uses a product development strategy. This approach is marked by a drive to find new product ideas and ways to extend current products into new areas, embodying a continuous quest for innovation. Market competition acts as a catalyst for this innovation, enabling firms like Sony to earn higher profits by producing more cost-effectively or by creating products with appealing features for consumers.

Product differentiation is a key aspect of this strategy, as firms strive to make their products stand out from competitors through unique physical characteristics, locations, intangible attributes, and perceptions. This differentiation allows innovative companies to maintain a competitive edge and achieve above-normal profits until competitors manage to catch up.