Question

For a company's competitive strategy to succeed in delivering good performance or the intended competitive advantage over rivals,

a) the company is well-advised to employ either a low-cost provider strategy or a best-cost provider strategy-differentiation strategies rarely work well because of the ease with which competitors are usually able to quickly copy most or all of the appealing product attributes a company comes up with.
b) the company must typically employ a value chain with more cost drivers and more value drivers than any other rival company in the industry.
c) it must be underpinned by resources and capabilities that enable the company to execute its strategy with a high degree of proficiency.
d) the strategy must be aimed squarely at achieving a cost-based competitive advantage-this is because, given sufficient time, competitors can clone most any product feature that buyers find quite appealing and thus defeat a strategy keyed to product differentiation.
e) it must possess the resources and capabilities to achieve best-cost status and thereby put itself in strong position to become a dominating market leader by outcompeting firms employing low-cost provider, broad differentiation, and focused strategies.

Answer 1

A company's competitive strategy must be supported by resources and capabilities unique to that company, and differentiation strategies can be successful if they are hard to replicate and align with customer needs. Companies focusing on a core competency often outperform diversified firms, maintaining a competitive edge through specialization. Additionally, comparative advantage and competitive pressures can influence business performance in the context of international trade and domestic markets.

Step-by-step explanation:

For a company's competitive strategy to truly be effective and sustainable, it must be supported by resources and capabilities that provide the company with the ability to execute the strategy effectively. Contrary to the belief that differentiation strategies are easily replicated and thus ineffective, they can be successful if the differentiating features are well-aligned with customer needs and are difficult for competitors to imitate. Furthermore, businesses that focus on a core competency—specializing in a narrow range of products or services—tend to perform better than those that diversify too widely. This focus allows the company to refine its expertise, potentially leading to a competitive advantage through superior quality, innovation, or branding.

The economic principle of comparative advantage also plays a role in business success, particularly in the context of international trade. Firms in smaller economies may face challenges in achieving economies of scale or engaging effectively in the value chain, but there is also less competition, which could allow for a stronger position domestically. Lastly, competition from firms offering better or cheaper products can be intense and may lead to improved market offerings, but companies leveraging their unique strengths can still find success and drive growth.