Drivers of an effective differentiation strategy include:
A) Product and service features
B) The cost-efficient production of a commodity
C) The relative importance of search goods in the industry
D) Economies of scale

Question

Quizplus · Accepted Answer

Product and service features play a significant role in differentiation strategy. Companies create unique features that set their products apart from competitors' products, which can lead to customer loyalty and increased revenues. Option B is incorrect because cost-efficient production of a commodity is not a differentiating factor, as it is easily replicable. Option C is incorrect because search goods are easily comparable, which makes it challenging to differentiate. Option D is incorrect because economies of scale do not usually result in differentiation, as they are not unique to a particular company.

Drivers of an Effective Differentiation Strategy Include