Which of the Following Is False Regarding How a Differentiation

question 33

Multiple Choice

Which of the following is false regarding how a differentiation strategy can help a firm to improve its competitive position relative to the Porter five-forces model?

• A) Firms will enjoy high customer loyalty.
• B) By increasing firm margins, it avoids the need for a low-cost position.
• C) It reduces buyer power because buyers lack comparable alternatives.
• D) Supplier power is increased, because suppliers will be able to charge higher prices for their inputs.

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Definitions:

Natural Rate

The unemployment rate or level of activity achieved in an economy when it is at full employment, without accelerating inflation.

Unemployment

The situation in which individuals who are capable of working are actively seeking work but are unable to find employment.

Cyclical

Pertaining to fluctuations in economic activity occurring due to the natural business cycle, including expansions, peaks, recessions, and troughs.

Structural

Relating to the underlying or fundamental aspects of something, especially with regard to economic sectors or market changes.