a) Use segmentation analysis to explain how a firm should position itself to compete within an industry. [12 marks]

b) Consider a large firm which offers a broad range of products at low cost to a wide range of consumers and a small firm which offers a small number of products to a few selected consumers. How does the strategic logic of the two firms compare? [8 marks]

c) What is the difference between vertical and horizontal differentiation? For each type of differentiation provide an example. [8 marks]

d) If there is strong horizontal differentiation between competitors' products, what pricing strategy should a firm choose and why? [6 marks]

e) Is it possible for a firm to have both a cost and a differentiation advantage? Support your answer with a diagram. [6 marks]

f) Consider the following statement: Competitive pressures are always stronger at the decline stage of the industry life cycle than at the growth stage. Use the five forces framework to explain the validity of this statement. [8 marks]

g) It is not possible for a firm to be profitable in a declining industry. Is this true? Explain your answer. [6 marks]

h) Industry attractiveness is the most important factor in determining firm profitability. Is this true? Explain your answer. [6 marks]