Final answer:
A differentiation strategy, which involves creating differentiated products, helps a company stand out and gain a competitive advantage. This can include variations in the product's physical attributes, location, intangibles, and perceptions.
Step-by-step explanation:
One strategy that distinguishes a company from its rivals and provides a sustainable competitive advantage is the differentiation strategy. This approach involves creating differentiated products that stand out in the marketplace. Firms may differentiate their products based on several attributes, including the physical aspects of the product, the location from which they sell the product, intangible aspects, and the perceived value of the product. Product differentiation is any action that firms take to make consumers believe their products are distinct from competitors', which can encompass aspects such as design, quality, marketing strategies, and consumer services.
Differentiating products can help a company achieve a competitive edge in several market structures, including Perfect Competition, Monopoly, and Monopolistic Competition and Oligopoly. While firms may compete on various factors such as price and advertising, offering unique and distinguished products can attract consumers and foster brand loyalty, thus sustaining a competitive advantage over time.