Which of the Following Constitutes a Disadvantage of the Differentiation

question 44

Multiple Choice

Which of the following constitutes a disadvantage of the differentiation strategy?

• A) A differentiation strategy lacks the capacity to generate buyer loyalty.
• B) Competitors are able to imitate the features well enough that they are no longer unique.
• C) The firm needs to attract huge numbers of customers in order to have a good overall level of profit.
• D) Differentiation lacks an ability to obtain premium prices from customers.
• E) A differentiation strategy allows the entrance of new companies in the market.

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Definitions:

Business Managers

Individuals responsible for overseeing the operational, financial, and strategic management of a company or a specific department.

Operating Activity

Financial activities directly related to the core business operations, including cash flows from selling goods and services.

Statement of Cash Flows

This financial document summarizes the cash and cash equivalents entering and leaving a company, highlighting cash flows from operating, investing, and financing activities.

Investing Activity

Financial actions related to the purchase and sale of long-term assets and other investments not considered cash equivalents.