Question

question 18
15 pts
which of the following is true about porters competitive strategies:

• differentiation strategies address whether the market scope is broad or narrow.
• differentiation can be broken down into low cost or broad scope categories.
• an airline using the differentiation strategy would be likely to offer travelers refreshments at a reasonable price, rather than serve bounteous meals.
• apple, inc. is a company that has benefited from a differentiation strategy and never tried to compete on price because it likes being perceived as an \elite\ brand.

Explanation:

🆕 New Concept Discovered: Porter's Generic Strategies
How businesses choose to compete in the market.

Step 1: Understand Porter's Generic Strategies

Michael Porter's framework identifies how a company pursues competitive advantage across its chosen market scope. The strategy is built on two dimensions:

• Source of competitive advantage: Low Cost (keeping costs down) vs. Differentiation (offering unique, premium value).
• Competitive scope: Broad target (industry-wide) vs. Narrow target (niche market).

Step 2: Evaluate the options

• Option 1: "Differentiation strategies address whether the market scope is broad or narrow."
• Analysis: Incorrect. Differentiation is about how a company competes (by being unique), whereas market scope (broad vs. narrow) is a separate dimension.
• Option 2: "Differentiation can be broken down into low cost or broad scope categories."
• Analysis: Incorrect. Differentiation and Low Cost are mutually exclusive sources of advantage in Porter's matrix.
• Option 3: "An airline using the differentiation strategy would be likely to offer travelers refreshments at a reasonable price, rather than serve bounteous meals."
• Analysis: Incorrect. Offering basic refreshments at a reasonable price is a cost-minimizing behavior (Cost Leadership). A differentiation strategy would focus on premium, unique services, such as serving bounteous, high-quality meals to stand out.
• Option 4: "Apple, Inc. is a company that has benefited from a differentiation strategy and never tried to compete on price because it likes being perceived as an "elite" brand."
• Analysis: Correct. Apple is a classic real-world example of a differentiation strategy. They focus on design, innovation, and brand image to charge premium prices, deliberately avoiding price wars with low-cost competitors.

Answer:

Apple, Inc. is a company that has benefited from a differentiation strategy and never tried to compete on price because it likes being perceived as an "elite" brand.