A risk of a focus strategy is that the needs of the customer within a narrow competitive segment may become more similar to those needs of customers in the whole market.

Question

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When a company focuses on serving a narrow competitive segment, there is a risk that the specific needs and preferences of that segment may start resembling those of the broader market. This may lead to increased competition and reduced differentiation, ultimately resulting in lower profits for the company.

A Risk of a Focus Strategy Is That the Needs