Question

Sweet Leaf Tea, a Texas-based maker of bottled iced tea, is a small but fast-growing firm that has gained a loyal following for its use of fresh, organic ingredients in its beverages. Although beverage industry experts recommended that Sweet Leaf replace the organic cane sugar and honey it uses with less costly high-fructose corn syrup, Sweet Leaf refused because of the company's mission to provide a high-quality, organic beverage to consumers. The 11-year old company has 50 employees, and its products are available in 30% of the U.S. market. Sweet Leaf Tea recently received multi-million dollar investments which will enable the business to expand its national presence.

Which of the following, if true, best supports the idea that Sweet Leaf Tea has implemented a competitive strategy of differentiation?
A) New Sweet Leaf Tea customers are initially attracted to the unique labels and logo on the bottles.
B) Loyal customers of Sweet Leaf Tea seek products that are USDA certified organic despite the associated higher costs.
C) Other brands of bottled iced tea compete with Sweet Leaf Tea by offering new flavors at competitive prices.
D) Sweet Leaf Tea sells both lemonade and teas in a variety of flavors that appeal to consumers of all ages.
E) Sweet Leaf Tea has not raised its prices in several years due to fears of losing regional customers.

Answer 1

The best choice that supports Sweet Leaf Tea's implementation of a competitive strategy of differentiation is option B) Loyal customers of Sweet Leaf Tea seek products that are USDA certified organic despite the associated higher costs.

Step-by-step explanation:

The best choice that supports Sweet Leaf Tea's implementation of a competitive strategy of differentiation is option B) Loyal customers of Sweet Leaf Tea seek products that are USDA certified organic despite the associated higher costs. This option indicates that the company is focusing on providing a high-quality, organic beverage that appeals to a specific segment of customers who prioritize organic ingredients.

By refusing to replace organic cane sugar and honey with high-fructose corn syrup, Sweet Leaf Tea demonstrates its commitment to its mission of offering a high-quality, organic beverage. This differentiation strategy helps the company stand out from other brands in the market and attract loyal customers who value organic certifications, even if it leads to higher costs.

Options A, C, D, and E do not directly support the idea of differentiation as they focus on factors like unique labels, different flavors, and price stability, which may attract customers but do not necessarily differentiate the product or the company from its competitors.