Company A has a highly differentiated product. There\'s great potential in the n

Question

Company A has a highly differentiated product. There's great potential in the next year for Company A to increase its sales volume. Increased sales volumes can enable Company A to reduce its costs. High volumes with low costs can lead Company A to have very high profits, some of which it can use to invest in further differentiating its products.

Imagine that you are a strategic consultant for Company B, one of Company A's competitors. Knowing the above information about Company A, what strategic advice would you give Company B?

Explanation / Answer

In that case, as a strategic consultant for company B, my strategic advice would be to manufacture the product which can counter that highly differentiated product of Company A. It is the best possible way to stop Company A to take any such advantage. Till then, Company B should promote extensively about their existing products and give special discounts on them, so that the customers of Company B don’t switch to Company A in any case.

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