Which of the following strategies helps companies to gain a competitive advantage in a competitive market?

• A. Raising prices above all competitors without justification
• B. Ignoring consumer preferences
• C. Reducing product quality to lower costs
• D. Differentiating their products from competitors

Answer: (D)

Verified step by step guidance

1. Understand the concept of competitive advantage: It refers to a company's ability to outperform its competitors by offering greater value to customers, either through lower prices, better quality, or unique features.
2. Analyze the given options by considering how each affects customer value and market position:
3. Raising prices above competitors without justification typically reduces customer demand and does not create value, so it does not lead to competitive advantage.
4. Ignoring consumer preferences means the company is not meeting customer needs, which usually results in losing market share rather than gaining advantage.
5. Reducing product quality to lower costs might lower prices but can harm the brand and customer satisfaction, which is often not sustainable for competitive advantage.
6. Differentiating products means offering unique features, better quality, or innovation that competitors do not have, which can attract customers and create a sustainable competitive advantage.