Chapter 5

Question 1

Bases of differentiation

Answer 1

Can be almost anything. Tangible things such as product features. Intangible things such as reputation, a cause or an ideal. Product attributes, Firm-customer relationships, firm linkages

Question 2

Impact of Differentiation on Porter’s 5 forces Entry

Answer 2

New firms must not only absorb normal start-up costs, but additional costs associated with overcoming incumbent firms

Question 3

Impact of Differentiation on Porter’s 5 forces Rivals

Answer 3

Each firm attempts to carve out its own niche

Question 4

Impact of Differentiation on Porter’s 5 forces Substitutes

Answer 4

Differentiation helps a firms current products appear more attractive than substitutes