Question

Porsche and Rolex compete by producing goods that are clearly different from those of the​ company's competitors. What strategy are these firms​ implementing?

a) Cost Leadership
b) Differentiation
c) Focus Strategy
d) Operational Excellence

Answer 1

Porsche and Rolex utilize a differentiation strategy to stand out in the market. This approach focuses on producing products with unique features and brand prestige to attract consumers who value these differences. Product differentiation and focusing on core competencies are key aspects of this strategy.

Step-by-step explanation:

Porsche and Rolex are implementing a differentiation strategy by producing goods that are clearly different from those of the company's competitors. Differentiation involves making a product distinctive in terms of its physical aspects, the location from which it is sold, intangible aspects, and perceptions. These differentiated products allow a company to compete by offering unique features or brand prestige that set it apart from competition, rather than primarily competing on price.

Product differentiation is any action that firms take to make consumers perceive their products as different from their competitors'. In the case of Porsche and Rolex, this likely includes luxury design, brand history, quality materials, and a reputation for excellence.

Businesses sometimes focus on their core competencies—a limited set of products or services that they do exceptionally well—rather than offering a wide range, which further reinforces their differentiation strategy.