The low-cost provider has an advantage where product offerings in a market are similar and more-or-less...

The low-cost provider has an advantage where product offerings in a market are similar and more-or-less interchangeable. Why is this?

In a differentiation strategy, would one expect higher margins or lower margins, and what are some common bases of differentiation?

What does it mean to say that a company strategy is "stuck in the middle"?

Expert Solution

The low-cost provider has an advantage where product offerings are similar since the cost is the only differentiation factor and lower the cost will increase the value of the product. It is like getting more for less. Therefore, a low-cost provider has the advantage in similar offerings.

In a differentiation strategy, one would expect higher margins since the product has features which are not available in other competitors and people are willing to pay more for experiencing new features.

Some of the common bases for differentiation are product features, product size, color variety, ease of use or portability etc.

Stuck in the middle means a product which is neither a cost leader nor a differentiation leader but is providing a product with few features at a middle of the range cost. People will not buy this product since it costs more than competitors nor does it provides any additional product features.

keosha answered 3 days ago

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