Exam E3 Topic 1 Question 59 Discussion

Actual exam question for CIMA's E3 exam
Question #: 59
Topic #: 1

The Board of a supermarket chain has decided that to compete more effectively against its competitors, it needs to change its strategy and pursue a differentiation-focus strategy. The Board's aim is to pursue differentiation to attract customers who have a higher disposable income and want to buy luxury food and other goods.
Which statements are valid for this differentiation-focus strategy?
Select ALL that apply.

A. In a differentiation-focus strategy, there is no need to exploit other activities in the value chain if they are not visible to the customer. B. The company will have to ensure that the food and other goods it supplies are of the best quality. C. Brand loyalty underpinning this strategy may fail if the cost differential between the price the company charges and that charged by its other competitors is too great. D. Using this strategy, the company will have the opportunity to promote goods that have previously underperformed. E. If this strategy is adopted, the company should aim to offer better value than its competitors.

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