![]() ![]() ![]() Note that costs are still important to a differentiator because it is possible that the costs of making the product unique will be greater than the premium consumers are willing to pay for it. A firm seeking to follow a differentiation strategy should attempt to develop and enhance its resources that promote customer responsiveness, quality, and/or innovation. If a firm is not receiving a premium price for its goods or services it is NOT a differentiator. The differentiation strategy focuses on developing a unique product or (equally useful) a perception of a unique product that customers are willing to pay a premium for. The key idea is that cost and price are independent choices, and this strategy is focused on cost. A firm can use such a position to either lower its prices and gain market share and sales from rivals or keep its prices at the present market level and make relatively more profit per unit sold. A firm that has successfully achieved a low cost position will have the lowest costs relative to competitors. A firm attempting to realize a low cost strategy should stress resources that facilitate efficiency. The low cost strategy emphasizes having the lowest costs, not necessarily the lowest price, in a market. How will the strategy satisfy those needs?. ![]()
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May 2023
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