Focused strategies keyed either to low cost or differentiation are especially appropriate for situations where: a. The market is composed of distinctly different buyer groups who have different needs or use the product in different ways. b. Most other rival firms are using a best-cost producer strategy. c. Buyers have strong bargaining power and entry barriers are low.

Question

Business

Itsy

14 April, 11:05

Focused strategies keyed either to low cost or differentiation are especially appropriate for situations where: a. The market is composed of distinctly different buyer groups who have different needs or use the product in different ways. b. Most other rival firms are using a best-cost producer strategy. c. Buyers have strong bargaining power and entry barriers are low.

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Ryan Contreras · Answer 1

c. Buyers have strong bargaining power and entry barriers are low.

Explanation:

In markets where buyers have stron bargaining power because options are abundant, and entry barriers are low (the reason why options are abundant), focused strategies that attempt at attracting customers with lower prices or product differentiation can be very important in maintaining a firm's market share, or improving it.

A lower cost can attract most types of customers because almost everyone is interested in saving as much as possible when they buy goods and services. However, product differentiation is another good strategy because if suppliers are many, people often need something special about the good to finally take the decision to purchase it.