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Explain How a Differentiation Strategy Enables a Business to Address

question 69

Essay

Explain how a differentiation strategy enables a business to address the five competitive forces in such a way that it can enjoy high levels of profitability.


Definitions:

WACC

The Weighted Average Cost of Capital, a calculation of a firm's capital cost that weighs each category of capital (equity, debt, etc.) proportionally.

Risk Level

A measure of the potential for loss in an investment or business decision.

Business Units

Distinct segments within a larger corporation, focused on specific product lines or market areas.

Weighted Average

An average in which each quantity to be averaged is assigned a weight, reflecting its importance or frequency relative to other quantities.

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