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Which of the following is false regarding how a differentiation strategy can help a firm to improve its competitive position vis-à-vis Porter's five forces?

It tends to reduce buyer power because buyers often lack comparable alternatives.
Supplier power is increased because suppliers will be able to charge higher prices for their inputs.
By increasing a firm's margins, it avoids the need for a low cost position.
Firms will enjoy high customer loyalty, thereby experiencing less threat from substitutes than its competitors.

Correct - Your answer is correct.

Wrong - Your answer is wrong.

Detailed Answer

Correct answer: (B)
Supplier power is increased because suppliers will be able to charge higher prices for their inputs.

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