Which of the following statements is incorrect about fundamental business strategies?
A)A company implementing a cost differentiation strategy is attempting to increase operating efficiency of assets and improve the inventory turnover ratio.
B)A company implementing a product differentiation strategy is attempting to improve its net profit margin through charging higher prices.
C)A company will be more profitable because it will attract a higher volume of customers and sales revenue when it follows a product differentiation strategy versus a cost differentiation strategy.
D)In general,a cost differentiation strategy results in lower profit margins whereas a product differentiation strategy results in higher profit margins.

Question

Quizplus · Accepted Answer

It is incorrect to say that a company will be more profitable with a product differentiation strategy compared to a cost differentiation strategy. The profitability depends on various factors such as the industry, competition, target market, and execution of the chosen strategy.

Which of the Following Statements Is Incorrect About Fundamental Business