Monday, October 29, 2012

Focus-differentiation (A new look into Strategy)

Most firms question if they should use a single generic model or they should use a a mixed one. Whether you should use Differentiation or Focus depends on your market needs. Infact there is much similarity between the two. Both of them stresses on quality. In Focus, companies target a niche market while carefully relying on a specific and a narrow segment of the community. Although choosing focus might limit your target customers, its a less competitve environment. Thus when focusing, branding is the main element . An example of a firm applying focus is Ferrari targeting the luxurious sports car industry.

In my opinion, a better strategy could be implemented if we mix both differentiation and focus. This is a dominated focus less dominating differentating model. In a Focus-Differentiation model  a company a company starts by applying focus then differentiate and once a chieved a recognized brand expand. Let's put it in practice.

An example of a company who wants to gain a competitive advantage in the food industry.
Practically the steps are
1) Enter Organic food industry (Focus)
    Target fitness centers
2) Provide high quality products (Differentiate)
    enhancebrand awareness
3) Expand to the healthy food industry, from restaurants to smoothie bars (Expansion)
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