Suppose Another Firm Found a Way to Offer IKEA's Customers

question 98

Multiple Choice

Suppose another firm found a way to offer IKEA's customers (young buyers interested in stylish furniture at low cost) additional sources of differentiation while charging the same price or to provide the same service with the same sources of differentiation at a lower price. What category of competitive risk to a focus strategy would this be?

• A) An industry-wide competitor decides that the market segment served by IKEA is worth entering.
• B) Focusing on a more narrowly defined segment and "outfocusing" the focuser.
• C) The needs of the customers in this narrow segment have become more similar to those of industry-wide competitors.
• D) Experience can narrow customer's perceptions of value of the firm's differentiated features.

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Definitions:

Lock-and-key Mechanism

A model for enzyme-substrate interaction suggesting that the enzyme and substrate possess specific complementary geometric shapes that fit exactly into one another.

Codexis

A company specializing in the development of enzymes and biocatalytic processes for pharmaceutical and biofuel productions.

Commercial Process

A systematic sequence of activities designed to produce a product or service for the marketplace.