Which of the following is false regarding how a differentiation strategy can help a firm to improve its competitive position vis à vis Porter's five forces?
A) by increasing a firm's margins, it avoids the need for a low-cost position
B) it helps a firm to deal with supplier power and reduces buyer power since buyers lack comparable alternatives
C) supplier power is increased because suppliers will be able to charge higher prices for their inputs
D) firms will enjoy high customer loyalty, thus experiencing less threat from substitutes than its competitors

Question

Quizplus · Accepted Answer

A differentiation strategy may help a firm to reduce supplier power by providing a unique offering that is not easily found elsewhere, increasing buyer power by creating customer loyalty, and reducing the threat from substitutes. However, the statement in option C is false because a differentiation strategy allows a firm to create unique products or services that are difficult for suppliers to replicate, reducing their bargaining power.

Which of the Following Is False Regarding How a Differentiation