Question

A bakery owner decides to offer only wedding cakes and special event cakes because other bakeries in the area offer so many products, and the owner believes her business can be known as "the place" to get a specialty cake.
Which of Porter's competitive strategies does this demonstrate?
Differentiation

Answer 1

Answer:

Differentiated Strategy

Explanation:

The reason is that the Bakery owner will now selll wedding cakes which means the bakery owner will sell extra ordinary cake which it desires to target a specific customer segment (wedding couples). The price charged on such cakes will be higher than an ordinary cake because of the extra ordinary cake specialty. The company that targets a specific customer segment due to its unique product also charges higher because its product is different from the rest of the products of the competitors. A well known saying is "Quality has costs", this means the bakery would charge higher to wedding couples because they are offering better quality product due to their experience and specialization.