Which of the following is true of a differentiation strategy?
A) Businesses that adopt this strategy should have little concern for costs.
B) It promises a high market share.
C) It aims at lowering a customer's sensitivity to price.
D) This is a type of retrenchment strategy.
E) Under this strategy, organizations charge lower-than-average prices.

Question

Quizplus · Accepted Answer

A differentiation strategy aims to make a product or service unique or different from competitors, which can lower a customer's sensitivity to price. This does not necessarily mean that the business has little concern for costs, nor does it promise a high market share. It is also not a type of retrenchment strategy, which involves cutting back on operations to save costs. Charging lower-than-average prices would be a cost leadership strategy, which is different from differentiation.

Which of the Following Is True of a Differentiation Strategy