17.) A broad differentiation strategy improves profitability when A. it is focus
ID: 422720 • Letter: 1
Question
17.) A broad differentiation strategy improves profitability when A. it is focused on product innovation. B. differentiating enhances product performance C. the differentiating features appeal to sophisticated and prestigious buyers. D the extra price the product commands exceeds the added costs of achieving the differentiation. E. the differentiator charges a price that is only fractionally higher than the industry's low cost provider. The chief difference between a broad differentiation strategy and a focused differentiation is A. the size of the buyer group that a company is trying to appeal to. B. Degree of bargaining power that buyers have. C. whether the product is strongly differentiated or weakly differentiated from rivals. D. Type of value chain being used to achieve a differentiation-based competitive advantage. E. the number of upscale attributes incorporated into the product offering. 18.)Explanation / Answer
17. option D, the extra price the product commands exceeds the added costs of achieving the differentiation.
when the price charged exceeds the cost of achieving the differentiation then there is extra profit which the company is getting. this extra profit improves profitability.
18. option A, the size of the buyer group that a company is trying to appeal to.
a focused differentiation strategy focuses on small buyer group, whereas broad strategy targets a large buyer group.
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