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 asset turnover ratio.
B) A company implementing a product differentiation strategy is attempting to improve its 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)Financial leverage is how a company finances its assets and can affect total profitability return to stockholders.

Question

Quizplus · Accepted Answer

It is not always true that a company following a product differentiation strategy will attract a higher volume of customers and sales revenue compared to a company following a cost differentiation strategy. The success of either strategy depends on various factors such as market demand, competition, product quality, marketing efforts, and customer preferences. Therefore, it is incorrect to generalize that a product differentiation strategy is always more profitable.

Which of the Following Statements Is Incorrect About Fundamental Business