A Differentiation Strategy Can Be Effective in Controlling the Power

question 45

Multiple Choice

A differentiation strategy can be effective in controlling the power of substitutes in an industry because:

• A) buyers are not brand loyal.
• B) substitute products are from a different industry.
• C) customers want the low-cost product.
• D) customers are loyal to a brand offering differentiated features that they value.

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Definitions:

Cartel Arrangement

An agreement among competing firms in the same industry to control prices, limit output, or divide markets, in order to maximize profits collectively.

Manufacturing Plant

A facility that is equipped with machinery and staff for the purpose of producing goods on a large scale.

Cost Function

A mathematical relationship that describes how the total cost of production changes with varying levels of output.

Cartel Arrangement

An agreement between competing firms or countries to control prices, limit supply, or restrain competition in a particular market.