Generally speaking, a differentiator chooses to divide its market into niches and segments in which customers will pay premium prices.
Your differentiation strategy is the way in which you make your firm stand out from otherwise similar competitors in the marketplace. Usually, it involves highlighting a meaningful difference between you and your competitors. And that difference must be valued by your potential clients. A strong differentiator will provide a competitive advantage for your firm.
This is why many firms choose to compete with a focused strategy. In a focused strategy you narrow your appeal to a niche audience.
For example, an accounting firm that works exclusively with chain restaurants has a very compelling differentiator to that niche market segment. However, a different audience segment, such as automobile dealers, would find no value in working with the restaurant specialists.
Therefore, we can conclude that the correct option is Generally speaking, a differentiator chooses to divide its market into niches and segments in which customers will pay premium prices.
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