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When firms maintain _______________ of product differentiation, they gain a competitive advantage.Select one:a.pricesb.creationc.reputationd.innovation

Question

When firms maintain _______________ of product differentiation, they gain a competitive advantage.

Select one:

  • a. prices
  • b. creation
  • c. reputation
  • d. innovation
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Solution

To answer the question regarding which option firms maintain for gaining a competitive advantage through product differentiation, let's analyze the given options:

  1. Prices: Maintaining differentiation based on prices is more about cost leadership than product differentiation.

  2. Creation: This could refer to creating new products, but it does not capture the essence of differentiation.

  3. Reputation: While having a good reputation can support differentiation, it is not a direct form of differentiation itself.

  4. Innovation: Maintaining innovation is closely linked to product differentiation. Firms that continually innovate can create unique products, thereby differentiating themselves from competitors.

Conclusion

The best option is d. innovation. Firms that maintain a strong focus on innovation in their products are likely to achieve product differentiation, which in turn provides them with a competitive advantage in the market.

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