Addams Coaches Inc. is a bus line with service to several major cities. It has several competitors that each offer service to one or two cities, and based on its current outlays, it cannot match or beat those competitors on price. Because of long-term contracts and an increase in the cost of gasoline, it is not possible to reduce expenditures at this time. Which of these strategies should Addams pursue instead?
A) Create a strategic group through mergers.
B) Compete based on inter-group rivalry, not intra-group rivalry.
C) Pursue a differentiated strategy.
D) Close the business until the cost of gas decreases.

Question

Quizplus · Accepted Answer

A differentiated competitor usually has higher cost structures and therefore charges higher prices. Differentiated competitors usually offer customers more convenience, luxury, or options.