The keys to sustaining a broad differentiation strategy are
A) to stress constant innovation to stay ahead of imitative rivals and to concentrate on a few differentiating features.
B) to charge a premium price that more than covers the extra costs of differentiating features and to convince customers to be brand loyal.
C) to out-innovate and out-advertise rivals.
D) to emphasize personalized customer service and to add as many differentiating features as possible.
E) to keep prices close to the average of all rivals and to spend heavily on new product R&D.

Question

Quizplus · Accepted Answer

A broad differentiation strategy will succeed if the company continuously innovates and stays ahead of imitative rivals. Additionally, focusing on a few differentiating features rather than trying to differentiate in every possible way also helps in sustaining the strategy. By doing so, the company can avoid spreading its resources too thin and can instead concentrate on developing and enhancing its unique features. Charging a premium price and relying on brand loyalty are not always effective in sustaining a differentiation strategy, especially in highly competitive markets where customers may be price-sensitive. Out-innovating and out-advertising rivals may be effective in the short-term but may not be sustainable and can be easily imitated by competitors. Similarly, emphasizing personalized customer service and adding too many differentiating features can be costly and may not appeal to all customers. Keeping prices close to the average of all rivals can lead to a loss of differentiation, and spending heavily on new product R&D may not always result in a sustained competitive advantage.

The Keys to Sustaining a Broad Differentiation Strategy Are