Which of the following profiles would best describe an industry having a Pure Product Differentiation strategy...

Which of the following profiles would best describe an industry having a Pure Product Differentiation strategy as being optimal because firms in the industry have pricing power? Assume all factors are equally important. (Palepu)

	a.	Low Industry Concentration, Few Legal Barriers to Entry, High Product Differentiation
	b.	High Industry Concentration, Easy Distribution Access for new entrants, Low Firm Excess Production Capacity
	c.	Many Industry Exit Barriers, Low First mover advantage, Low Product Differentiation
	d.	Supply < Demand, High Industry Concentration, Low Fixed to Variable Cost Ratio

Expert Solution

Question Summary : profiles that would best describe an industry having a Pure Product Differentiation strategy

Solution Option D Supply < Demand, High Industry Concentration, Low Fixed to Variable Cost Ratio

Explanation

Option 1: Low industry concentration is not possible in product differentiated industry. Infact when the product is well differentiated , there will be few firms with their own exclusive product

Option 2: Easy distribution access fornew entrants is not possible because eah company caters to its exclusive customers

OPtionc : Low product differentiation is not possible

Option D. : Demand is more because there are no substitutes, there is high industry concentration, because of differetiation variable costs are high

jeff jeffy answered 2 years ago

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