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Explain product differentiation-cost leadership advantage

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Thinking about product differentiation, a firm with a highly differentiated product can increase the volume of its sales. Volume increases can help the firm lower costs. High volumes with low costs lead to very high profits. This firm can then invest further in differentiating their product. What advice would be given to a firm whose competition is enjoying this product differentiation and cost leadership advantage?

Give a reasonable answer to justify the answer. Elaborate it as long as you can.

Reference no: EM132890811

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