A differentiation strategy works best when
A)buyers' needs are homogeneous.
B)many rival firms are also pursuing a differentiation approach.
C)firms have ample excess cash to invest in R&D activities.
D)there are few other ways to make a product unique to buyers.
E)technological change is fast-paced and competition revolves around rapidly evolving product features.

Question

Quizplus · Accepted Answer

A differentiation strategy is most effective when there are opportunities to make a product unique through innovation and personalized features, which is possible in a fast-paced technological environment. When there are many rival firms pursuing a similar differentiation strategy or buyers are homogeneous, it becomes more challenging to create a unique selling proposition, and other strategies may be more effective. Access to excess cash is also beneficial, but not necessarily a requirement for implementing a successful differentiation strategy.

A Differentiation Strategy Works Best When