A business with a differentiation strategy will add cost to an activity only as long as the activity has a positive margin.

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A differentiation strategy focuses on creating a unique product or service that sets a business apart from its competitors. This often involves adding costs to activities such as research and development, product design, and marketing. However, these costs should be balanced by the ability to charge a higher price for the differentiated product or service. Therefore, a business with a differentiation strategy will only add cost to an activity if it can generate a positive margin, meaning that the added cost will result in a higher price or greater sales volume that more than offsets the added cost.

A Business with a Differentiation Strategy Will Add Cost to an Activity