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differentiation strategy

1. Explain how a differentiation strategy enables a business to address the five competitive forces in such a way that it can enjoy high levels of profitability.

2. Explain how a cost leadership strategy permits a firm to address the five forces in their competitive environment so it can enjoy higher-than-normal profits.

3. What are the four factors described in Porter's diamond of competitive advantage? How do the four factors explain why some industries in a given country are more successful than others?

4. Describe the three (3) characteristics of entrepreneurial leadership.

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1. . Explain how a differentiation strategy enables a business to address the five competitive forces in such a way that it can enjoy high levels of profitability.
The differentiation strategy enables a business to address the five competitive forces in the following way. The threat of the entry of new competitors is addressed because the new competitors are not able to differentiate the product because the business has technical know-how and knowledge essential for differentiation. The threat of substitute products is addressed by differentiation because substitutes normally target the average product, not the differentiated product. The bargaining power of customers is reduced because the customers get a unique product from the business that differentiates. In a way it enjoys a monopoly power in the niche. The bargaining power of suppliers is reduced because premium pricing of differentiated product enables the firm to buy from other suppliers. The intensity of competitive rivalry is reduced by differentiation because the product is not exactly similar to that made by other competitors. ...

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