1. In a competitive market, what strategy is a company most likely using if it creates a distinctive product to stand out from its rivals?

• A. Price discrimination strategy
• B. Cost leadership strategy
• C. Differentiation strategy
• D. Market penetration strategy

Answer: (C)

Verified step by step guidance

1. Understand the context: In a competitive market, firms choose strategies to gain an advantage over rivals. These strategies often relate to how they position their products or manage costs.
2. Identify the key characteristic of the strategy described: The company creates a distinctive product to stand out. This means the product is unique or perceived as different by consumers.
3. Recall the main types of competitive strategies: Cost leadership (competing on lowest cost), differentiation (offering unique products), price discrimination (charging different prices to different consumers), and market penetration (increasing market share through pricing or promotion).
4. Match the description to the strategy: Since the focus is on creating a distinctive product, this aligns with the differentiation strategy, which emphasizes uniqueness rather than cost or pricing tactics.
5. Conclude that the company is most likely using the differentiation strategy to gain a competitive edge by making its product stand out from rivals.