Which of the Following Is False Regarding How a Differentiation

question 8

Multiple Choice

Which of the following is false regarding how a differentiation strategy can help a firm to improve its competitive position vis à vis Porter's five forces?

• A) by increasing a firm's margins, it avoids the need for a low-cost position
• B) it helps a firm to deal with supplier power and reduces buyer power since buyers lack comparable alternatives
• C) supplier power is increased because suppliers will be able to charge higher prices for their inputs
• D) firms will enjoy high customer loyalty, thus experiencing less threat from substitutes than its competitors

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Definitions:

Promisee

The individual or entity to which a promise or agreement is made.

Purely Incidental

Occurring by chance and of secondary importance, without direct relevance to the main issue.

Breach of Contract

The failure to perform as specified in a contract without a lawful reason.

Donee Beneficiary

A third party who benefits from a contract in which a promisee promises to perform certain actions that benefit this third party.