Question

While Influx Electronics Inc. incurs $350 to manufacture a laptop, its competitor, Hearthstone Electronics Inc., incurs $300. However, laptops of both the companies have been able to create the same value among customers. From the given scenario, it can be inferred that

Answer 1

From the given scenario, it can be inferred that Hearthstone Electronics and Influx Electronics share differentiation parity.

Explanation:

A business achieves differentiation of parity when it generates the same perceived value as its rival organization. A cost leader will achieve a competitive advantage as long as its generated economic value is greater than its competitors'.

The parity of differentiation deals with value and not with pricing. Parity to differentiation happens when a business generates the same value as its rival. Price parity means paying the same prices as a rival, with pricing involved.