125k views
2 votes
A differentiation strategy enables a business to address the five competitive forces by

a) lessening competitive rivalry by distinguishing itself
b) having brand-loyal customers become more sensitive to prices
c) increasing economies of scale
d) serving a broader market segment

User Lovntola
by
8.6k points

1 Answer

2 votes

Final answer:

A differentiation strategy enables a business to address the five competitive forces by lessening competitive rivalry, having brand-loyal customers become more sensitive to prices.

Step-by-step explanation:

A differentiation strategy enables a business to address the five competitive forces by:

  1. Lessening competitive rivalry by distinguishing itself: When a business differentiates its products or services from its competitors, it creates a unique selling proposition that sets it apart. This reduces direct competition and reduces rivalry.
  2. Having brand-loyal customers become more sensitive to prices: When a business successfully differentiates its products and builds a strong brand, its customers become more loyal. These loyal customers are often willing to pay premium prices for the unique features and benefits provided by the differentiated products.
  3. Increasing economies of scale: Differentiation can lead to increased market share and larger sales volumes, allowing the business to achieve economies of scale. This can lead to lower production costs and increased profitability.
  4. Serving a broader market segment: By offering differentiated products, a business can attract a broader range of customers. This can help the business tap into new market segments and increase its overall market share.

User Fabio Barros
by
7.6k points