A shrinking market segment poses the greatest threat to a company pursuing which of the following strategies?
A) Cost leadership
B) Differentiation
C) Focused differentiation
D) Growth
E) Both cost leadership and differentiation simultaneously

Question

Quizplus · Accepted Answer

Focused differentiation strategy focuses on the needs and preferences of a specific market segment. If that segment is shrinking, then pursuing this strategy becomes risky as it may result in a decline in sales and revenues. Cost leadership and differentiation strategies may still be viable options as they target broader markets and can adapt to changing market conditions. Growth strategy focuses on expanding the customer base and may still work if the company can identify new market segments to target.

A Shrinking Market Segment Poses the Greatest Threat to a Company