Question
A business has hired you as a consultant. The proprietor has owned the business for many years but has been struggling with declining sales in
A business has hired you as a consultant. The proprietor has owned the business for many years but has been struggling with declining sales in the past year due to increased rivalry. Although the proprietor argues that they don't want to alter the product at all since it brought them success in the past, you recommend they further differentiate the product. Which is NOT part of your explanation of your advice?
a. Differentiation will make it less likely new competitors will enter.
b. The greater the degree of rivalry, the higher your profits will be.
c. If you differentiate, you'll weaken competitor incentive for price undercutting.
d. Your differentiation is a key strategy that shapes your market power and profitability.
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