Certified Supply Chain Professional (CSCP) Practice Exam

What is generally the main objective of a differentiation strategy?

1. To minimize costs

2. To enhance product features

3. To increase market share

4. To reduce operational overhead

The correct answer is: To enhance product features

The main objective of a differentiation strategy is to enhance product features, thereby making a company's offerings stand out in the marketplace. This approach focuses on delivering unique attributes or superior quality that provides value to customers. By improving product features, a company can attract a specific segment of consumers who appreciate what distinguishes its products from competitors. This strategy allows businesses to command higher prices because of the perceived added value offering through innovation, brand image, or superior technology. While minimizing costs, increasing market share, and reducing operational overhead are important aspects of business strategy, they are not the primary focus of differentiation. Instead, differentiation centers on understanding customer needs and preferences, developing features or attributes that meet these needs, and communicating the benefits effectively to the target market.