Question

Focus strategies are: a. sheltered from the risks associated with industry-wide strategies because of their niche focus. b. able to avoid global risk by focusing on niches in national or regional markets. c. faced with more types of risks than are industry-wide strategies. d. more subject to failure than industry-wide strategies.

Answer 1

Answer:

The correct answer is letter "C": faced with more types of risks than are industry-wide strategies.

Explanation:

A focus strategy is an approach companies take to dedicate their operations to the production of one specific good for one specific market. While it allows the firm to specialize and give consumers a more tailored product, it represents a risk when competitors outperform its capabilities. Besides, the company does not take advantage of diversification because its target population is reduced. Focus-strategy companies are at a disadvantage compared to industries with wider scope.

Answer 2

Answer:

c. faced with more types of risks than are industry-wide strategies.

Explanation:

Focused strategy is when a company has a niche or segment and produces goods that adequately satisfies the needs of customers. Other strategies include differentiation strategy and low cost strategy.

Focus strategy has a higher risk of failing than industry-wide strategy because in the case where there is a downturn in a particular segment where the company specialises it will lead to business failure. Demand for their services will affect performance.

While in industry-wide strategy when there is downturn in one segment, the company will focus on another segment to survive.