The risks of a focused strategy based on either low-cost or differentiation include
A) the chance that niche customers will bargain more aggressively for good deals than customers in the overall marketplace.
B) the chance that competitors will find effective ways to match the focused firm's capabilities in serving the target niche.
C) the potential for the segment to be highly vulnerable to economic cycles.
D) the potential for segment growth to race beyond the production or service capabilities of incumbent firms.
E) All of these choices are correct.

Question

Quizplus · Accepted Answer

Focused differentiation strategies are keyed to offering carefully designed products or services to appeal to the unique preferences and needs of a narrow,well-defined group of buyers (as opposed to a broad differentiation strategy aimed at many buyer groups and market segments).The first major risk is the chance that competitors will find effective ways to match the focused firm's capabilities in serving the target niche.The second risk of employing a focus strategy is the potential for the preferences and needs of niche members to shift over time toward the product attributes desired by the majority of buyers.

The Risks of a Focused Strategy Based on Either Low-Cost