Distinguishing features of the each Strategy: Parameter Cost leadership Differentiation Focus: low cost Focus: Best-cost strategy strategy differentiation strategy Strategic target A broad A broad A narrow market A narrow market Value-conscious of the of the niche in which in which buyer buyers market market buyer needs and needs and preferences are preferences are distinctively distinctively different different Basis of Lower overall Ability to offer Lower overall costs Attributes that Ability to give competitive costs than those buyers something that rivals in appeal specifically customers more advantage of competitors attractively serving niche to niche buyers value for money different from that buyers of its competitors Product line A good basic Many product Features and Features and Items with product with few variations; wide attributes tailored attributes tailored appealing frills (acceptable selection; emphasis to the tastes and to the tastes and attributes; quality and of differentiating requirements of requirements of assorted upscale limited selection) features niche buyers buyers features Production A continuous Differentiating A continuous Custom-made Produce upscale emphasis search for cost features that buyers search for cost products that features and reduction are willing to pay reduction the tastes and appealing without for; product incorporating requirements of attributes at lower sacrificing superiority features and niche buyers cost than rivals acceptable attributes matched quality and to niche buyer essential features preferences Marketing Trying to make a Flaunting Communicating Communicating Flaunt delivery of emphasis virtue out of differentiation attractive features how the product best deliver product features features; charging a of a budget-priced offering does the comparable that lead to low premium price to offering that fits best job of meeting features at a lower cost cover the extra niche buyers’ niche buyers’ price than rivals or costs of expectations expectations match rivals’ prices differentiating and provide better features features Keys to Economical Constant innovation Constant Commitment to Unique expertise sustaining the prices/good to stay ahead of innovation to stay serving the niche in simultaneously strategy value; low costs imitative of imitative better than rivals; managing (year after year) competitors; a few competitors; a few does not blur the down while in every area of key differentiating key differentiating organisation’s incorporating the business features features image by entering upscale features other market and attributes segments or adding other products to widen market appeal
Distinguishing features of the each Strategy: Parameter Cost leadership strategy Differentiation strategy Focus: low cost Focus: differentiation Best-cost strategy Strategic target A broad of the market A broad of the market A narrow market niche in which buyer needs and preferences are distinctively different A narrow market in which buyer needs and preferences are distinctively different Value-conscious buyers Basis of competitive advantage Lower overall costs than those of competitors Ability to offer buyers something attractively different from that of its competitors Lower overall costs that rivals in serving niche buyers Attributes that appeal specifically to niche buyers Ability to give customers more value for money Product line A good basic product with few frills (acceptable quality and limited selection) Many product variations; wide selection; emphasis of differentiating features Features and attributes tailored to the tastes and requirements of niche buyers Features and attributes tailored to the tastes and requirements of buyers Items with appealing attributes; assorted upscale features Production emphasis A continuous search for cost reduction without sacrificing acceptable quality and essential features Differentiating features that buyers are willing to pay for; product superiority A continuous search for cost reduction incorporating features and attributes matched to niche buyer preferences Custom-made products that the tastes and requirements of niche buyers Produce upscale features and appealing attributes at lower cost than rivals Marketing emphasis Trying to make a virtue out of product features that lead to low cost Flaunting differentiation features; charging a premium price to cover the extra costs of differentiating features Communicating attractive features of a budget-priced offering that fits niche buyers’ expectations Communicating how the product offering does the best job of meeting niche buyers’ expectations Flaunt delivery of best deliver comparable features at a lower price than rivals or match rivals’ prices and provide better features Keys to sustaining the strategy Economical prices/good value; low costs (year after year) in every area of the business Constant innovation to stay ahead of imitative competitors; a few key differentiating features Constant innovation to stay of imitative competitors; a few key differentiating features Commitment to serving the niche better than rivals; does not blur the organisation’s image by entering other market segments or adding other products to widen market appeal Unique expertise in simultaneously managing down while incorporating upscale features and attributes