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the risks of a differentiation strategy do NOT include which of the following? A)    The differentiation strategy...

the risks of a differentiation strategy do NOT include which of the following?

A)    The differentiation strategy is built on product features that the customer values.

    

C)    The means of differentiation no longer provide value to the customer.

    

B)    Customers may find the price differential between the low-cost producer and the differentiated product too large.

    

D)    Customers' learning can narrow a customer's perception of the value of a firm's differentiated features.

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Answer #1

Answer: A (The differential strategy is built on product features that the customer values)

Rationale: It is quite possible that the differentiated product might not be valuable to the customer and this can pose a great risk. Also, when companies try to differentiate a product by adding unique features, the final cost of the product increases and sometimes this final price becomes too high as compared to producer making low cost products. Moreover, sometimes customers, over time, narrows their perception of value provided by the product and the firm and this can result losing market share.

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