Rest & Sleep Inc. is a mattress manufacturing firm. By manufacturing related pro

Question

Rest & Sleep Inc. is a mattress manufacturing firm. By manufacturing related products such as bed covers, comforters and quilts, and pillows, it has gained significant competitive advantage as it has managed to create profits in all these markets as well. Rest & Sleep creates a challenge for the other companies in the market by providing unique value through its customer services and warranties. Which of the following terms best describes what Rest & Sleep Inc. is practicing? 1. Business unit strategy 2. Corporate strategy 3. Unrelated diversification 4. Market penetration

Explanation / Answer

Diversification is the name given to the growth strategy where a business markets new products in new markets

Market penetration is the name given to a growth strategy where the business focuses on selling existing products into existing markets.

so these possibilities are ruled out.

The company here is using Business unit strategy. It has created competitive advanatge by manufacturing related products.A competitive advantage is one gained over competitors by offering consumers better value.One can increase value by lowering prices or increasing benefits and services to justify the higher price. By providing customer service and warranties it attempts to provide value services to its customers.

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