Answer the following statements true (T) or false (F)

Question

1. Luxury carmaker Rolls-Royce has a focused-differentiation strategy. 
2. A single-product strategy can be described as focused but vulnerable. 
3. A small florist most likely follows a diversification strategy. 
4. General Electric sells lighting products and is also involved in plastics, broadcasting, and financial services. GE uses a related diversification strategy. 

Answer 1

1. TRUE
The focused-differentiation strategy is to offer products or services that are of unique and superior value compared to those of competitors and to target a narrow market. Some luxury cars, like the Rolls-Royce, Ferrari, and Lamborghini, are so expensive that only a few car buyers can afford them.
2. TRUE
In a single-product strategy, a company makes and sells only one product within its market. This allows you to focus your manufacturing and marketing efforts just on that product. The risk, of course, is that you are vulnerable if a rival gets the jump on you, or if an act of God intervenes, and your entire business may go under.
3. FALSE
A single-product strategy is followed by the small florist who sells only one product within its market.
4. FALSE
Unrelated diversification means operating several businesses under one ownership that are not related to one another. GE, which began by making lighting products, diversified into such unrelated areas as plastics, broadcasting, and financial services.