Answer :
Product differentiation supports the unique positioning of firms in the industry, making them stand out and reducing the threat of rivalry.
Product differentiation is a strategy used by firms to create a unique and distinct position for their products or services in the market. By offering unique features, attributes, or benefits, companies aim to stand out from their competitors and attract customers. This differentiation can help reduce the threat of rivalry among incumbents in the industry.
When firms differentiate their products effectively, they create a perceived value and uniqueness that makes customers less likely to switch to competitors' offerings. This reduces the direct competition and rivalry among firms, as they are targeting different customer segments or offering different value propositions. As a result, firms can maintain their market share, command premium prices, and enjoy customer loyalty, which can lead to a more stable and less competitive market environment.
On the other hand, option c) is not accurate as product differentiation, if done successfully, can reduce price wars among incumbents. When products are perceived as unique and offer additional value, firms can set higher prices, as customers are willing to pay for the differentiated features. This reduces the need for aggressive price competition and can lead to more sustainable profitability for firms.
So, product differentiation supports the unique positioning of firms in the industry, making them stand out and reducing the threat of rivalry. It allows firms to target specific customer segments and create customer loyalty, leading to a more stable and less competitive market environment.
Learn more about product differentiation here:
https://brainly.com/question/33900041
#SPJ11