Focusing provides the ability to secure a competitive edge,but it also carries some risks that will be detrimental to the focused firm,such as
A)the chance that competitors will not find effective ways to match the focused company's capabilities in serving the market niche.
B)the potential for the preferences and needs of niche members to shift over time toward mainstream provider product attributes.
C)the potential for the niche to become so attractive that it will not attract new competitors,thereby providing excessive market segment profits.
D)the likelihood that a focused company will become so cost efficient that it will achieve excessive profits.
E)the possibility that a broad low-cost strategy will always trump a firm's best-cost provider strategy.

Question

Quizplus · Accepted Answer

Focusing on a narrow niche may leave the firm vulnerable to changes in the preferences and needs of niche members. As their preferences shift towards mainstream provider product attributes, the focused firm may lose its competitive edge. Option A is incorrect because it assumes that competitors will not find effective ways to match the focused company's capabilities. Option C is incorrect because excessive market segment profits may attract new competitors, leading to increased competition and lower profits. Option D is incorrect because becoming too cost-efficient may lead to reduced investments in research and development and ultimately affect the firm's ability to maintain its competitive edge. Option E is incorrect because a best-cost provider strategy can be competitive and successful, even against a broad low-cost strategy.

Focusing Provides the Ability to Secure a Competitive Edge,but It