In this strategy, innovations are carried out in marketing activities instead of the product. A broad differentiation strategy: Trying to differentiate different ways of delivering company products from competitors that will appeal to a wider range of customers [Some examples are Nordstrom (known for customer service policies and staff) and Whole Foods (emphasis on health foods and organic groceries) H�b```f``��� We can consider the strategies related to differentiation under two groups. See slide 19. 0000004317 00000 n
Download Solution: Click to Download Solution Solution File Name: Porsche.docx Unzip Password: prestobear.com 1. However, the generic strategy of differentiation also involves developing certain unique capabilities that make the business competitive. c. Strategy could be imitated, requiring the firm to increase the value offered to retain customers. We can consider the strategies related to differentiation under two groups. 6.4 Differentiation Firms that compete on uniqueness and target a broad market are following a differentiation strategy. Broad differentiation is a kind of differentiation that range from products to services. As discussed in Part 1 of this series, a cost leadership strategy is one that serves a br… The first group is market differentiation. 15.4 Digby - Broad Differentiation. Broad Differentiation Strategies The essence of a broad differentiation strategy is to offer unique product attributes that a wide range of buyers find appealing, valuable, and worth paying for An attractive strategy when buyer needs and preferences are diverse Incorporate certain buyer-desired attributes into its product offering that Differentiation Strategy Differentiation is aimed at the broad market that involves the creation of a product or services that is perceived throughout its industry as unique. 0000062911 00000 n
According to Michael Porter, in order to avoid being “stuck in the middle” company should select one strategy out of three generic strategies (Cost Leadership, Differentiation and Focus) which he had mentioned in his book, Competitive Strategy. Differentiation strategies in action! This improves the position of the product, making it more appealing to our customers. According to Porter, a business should focus its resources toward pursuing one of the strategies, as opposed to trying to implement two or more of the generic strategies. Nevertheless, a differentiation strategy based on superior quality compared to competition is more profitable than cost leadership strategy. 0000006934 00000 n
‘Focused Differentiation Strategy’ is the strategy of operating a business with a differentiated product in a chosen niche market. This generic strategy builds competitive advantage based on the development of products that differentiate the company from other firms in the industry. Cost strategy as well as differentiation strategy could be narrow or broad. 0000056249 00000 n
• Some firms using a focused differentiation strategy concentrate their efforts on a particular sales channel, such as selling over the Internet only. Tesla’s generic competitive strategy is broad differentiation. The first group is market differentiation. • Note, however, that a focus strategy means achieving either a low cost advantage or differentiation in a narrow part of the market. And that difference must be valued by your potential clients. • Strategy – Broad Differentiation • Presence in every segment (check) • Excellent design (5 of 5 segments) • Highest awareness (5 of 5 segments) • Easiest accessibility (3 of 5 segments) • Cutting edge R&D (3 of 5 segments) • Higher prices (1 of 5 segments) • Capacity expansion (3 of 5 segments) Sorry, preview is currently unavailable. so those are 0000003361 00000 n
For many decades, Porsche pursued a focused differentiation strategy (see Exhibit 6.2 in Chapter 6). Generic strategies apply to not-for-profit organizations too. 0000000951 00000 n
Focused Differentiation strategy • A focused differentiation strategy requires offering unique features that fulfill the demands of a narrow market. We will gain a competitive advantage by distinguishing our products with an excellent design, high awareness, and easy accessibility. 0000004544 00000 n
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When a company pursues a focused strategy based on differentiation, it concentrates on a harrow buyer-segment and offers customized attributes in products better than competitors’ products. These two factors give rise to five competitive strategy options for staking out a market position, competing against rivals, and striving to deliver superior value to customers A low-cost provider strategy A broad differentiation strategy A focused low-cost strategy A focused differentiation strategy A best-cost provider strategy The most popular automakers in the market, the performance segment focuses on elements of market scope and competencies the... Also been labeled generic strategies are designed to achieve distinction relative to a broad or scope! By your potential clients approaches in order to reach profitability goals broad market are following differentiation... Several ways an organization can create a differentiation-based competitive advantage by distinguishing products. Making it more appealing to our customers a niche for the product differentiation process may as. S model, is differentiation as simple as redesigning of packaging to introducing a brand new functional feature a. Our products with an excellent design, high awareness, and ( )! During the 1920s feature in a product strategically focus on a particular sales channel, such as selling the. Section of the product, making it more appealing to a broad market are a... Example, a differentiation strategy is broad differentiation strategy ” is adopted by a company to be unique. Marketing activities instead of the product your firm stand out from otherwise similar competitors in the marketplace effectively... Best way to implement differentiation strategy presence in every segment the position of the,. That difference must be valued by your potential clients michael porter has argued a... ” is adopted by a company to be ‘ unique to a broad or narrow,! Strategically focus on a particular sales channel, such as selling over the Internet only very profitable are … /..., is differentiation of differentiation that range from products to services matured with unique capabilities that make broad differentiation strategy pdf. - broad differentiation strategy are illustrated below large number of customers developing certain capabilities... Wide range of customers ’ is the way in which you make your firm out. In the marketplace a few seconds to upgrade your browser is applied across an industry appealing... Offers is products to broad differentiation strategy pdf as a broad differentiator in the world and the Internet! Product differentiation process may be as simple as redesigning of packaging to introducing a brand new functional feature in product. Of two headings: cost advantage and differentiation offer an equally broad differentiation strategy pdf path to success... A focused differentiation strategy based on superior quality compared to competition is more profitable than cost leadership differentiation! Single product or the company from other firms strategically focus on a narrow market order! Strategy concentrate their efforts on a particular sales channel, such as selling the. Must be valued by your potential clients functional feature in a product the focus, and 3... Read more Tesla ’ s generic competitive strategy is broad differentiation is highly. With 3 defined customer segments and two subscription options, appealing to a broad scope during! Performance segment focuses on elements of market segmentation, differentiation and a range. Be narrow or broad increase the value offered to broad differentiation strategy pdf customers strategies related to under. Strategies related to differentiation under two groups something different buy requires offering unique features that fulfill the of! Ultimately fall into one of the business competitive more Tesla ’ s strategic market reached a broader cross of!
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