A business model based on differentiation requires a company to
A) make strategic choices that reinforce each other and increase the value of a good or service in the eyes of customers.
B) serve several market segments simultaneously to take full advantage of differentiation.
C) systematically raise its prices at stipulated times.
D) develop a functional organization structure.
E) all of these.

Question

Quizplus · Accepted Answer

A business model based on differentiation requires a company to make strategic choices that reinforce each other and increase the value of a good or service in the eyes of customers. This means the company needs to differentiate its products or services from its competitors in a way that is meaningful to its target market, and then build a brand around that differentiation. Serving several market segments and raising prices are not necessarily requirements for differentiation. Developing a functional organizational structure may support the implementation of the differentiation strategy, but it is not the defining characteristic of this business model.

A Business Model Based on Differentiation Requires a Company to