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How can a firm be successful by pursuing a differentiation strategy? What are some of the...

How can a firm be successful by pursuing a differentiation strategy? What are some of the risks associated with a differentiation strategy? Can you think of a successful company that uses this strategy?

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Answer #1

How can a firm be successful by pursuing a differentiation strategy?

  • differentiation strategy provides a competitive advantage to a company
  • It helps in differentiating a product from the competetive product
  • It can help in entering new unexplored markets
  • It can help in increasing market share by increasing sales

What are some of the risks associated with a differentiation strategy?

  • Many a times customers are not ready for new technology or a change in the specifications of a product due to which differentiation fails
  • differentiation strategy costs a fortune to company
  • Competetors could come up with same differentiation before them
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