Question

Fascinating Fez, a 125-year-old hat and cap manufacturer, markets very high-quality stylish headwear, many of which cost more than $1,000 each, to fashionistas globally, always maintaining its reputation of superior value in its narrow market. Fascinating Fez is using a cost-focus strategy.A) TrueB) False

Answer 1

Answer:

B) False

Explanation:

In a cost focus strategy, the company tries to create a cost advantage in it's targeted market segment.

In the given case, the strategy employed by the hat manufacturer is differentiation focus strategy. By using such a strategy, a firm focuses on providing differentiated products i.e unique superior quality products which are different than those of the competitors.

Cost focus stresses upon lowering costs in narrow markets, while differentiation focuses upon providing specialized different products which are focused upon catering to the needs of the customers of a narrow markets segment.