Which of the following statements is true of a niche strategy?
a. A niche strategy is most suitable for firms that have achieved economies of scale.
b. A niche strategy requires business firms to reduce after-purchase service options.
c. A niche strategy involves removing extra frills from products.
d. A niche strategy is ideal for small companies with limited resources.
ANSWER: d
or small companies with limited resources that potentially face giant competitors, niche targeting may be the only viable option. A market segment that has good growth potential but is not crucial to the success of major competitors is a good candidate for developing a niche strategy.
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