Name: Generic Business Strategies
Uploaded: 2023-09-30
Duration: 4 min 17 s
Description: Our focus today is Focused Differentiation which is one of the generic business strategies..

[Audio] Our focus today is Focused Differentiation which is one of the generic business strategies.. 

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[Audio] Focus differentiation involves offering a unique product or service to a narrow niche of potential customers. It leverages uniqueness and targeting sales strategy to a small niche.. 

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Focused differentiation is a focus generic strategy that offers a unique product or service to a narrow niche of potential customers. Its competitive advantage is their uniqueness: a specialized product or service, a unique marketing strategy, more personal customer service, etc. Its market is scope, only focusing on a small group of customers: the elite, campers, coffee enthusiasts etc. There is variability in how a certain company decides to implement this strategy.

[Audio] Example is the rolex company which sells unique luxury watches to the elite.. 

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But there are the underlying commonalities, that help identify and set them apart from other companies. There are a lot of companies that have utilized this strategy to varying degrees and in varying success levels. Example include: Rolex watch company that sell really unique watches which customers are willing to pay to acquire despite their expensiveness.

[Audio] The following are the characteristics: one, product or service uniqueness. Two, high quality and premium pricing.. 

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Characteristics of focused differentiation strategy

1. Product or Service Uniqueness Products are often set-apart from other ones in the same field.  Products have extra features or a unique taste to it.  Services are also a little different. Focusing on efficiency and a very hands-on customer service.
 2. High Quality and Premium Pricing Differentiated products always have a quality to them. These quality products and services attract a premium price.  Customers are ready to pay for the convenience and the unique value.

[Audio] Three, targeted marketing and branding. Four, narrow market focus.. 

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3. Targeted Marketing and Branding The marketing is targeted to a particular niche. For example, if the targeted audience is Gen Z, they might use social media ads to get them. They create a unique brand that is easily identifiable to that particular market segment.
 4. Narrow Market Focus The company directs its resources towards a particular market gap. This specialization allows the company to be more sensitive towards the needs of their customers. The company can thus be able to deliver on the needs and expectations of the customers.

[Audio] Five, competitive advantage. Six, risk management. I have highlighted certain lines to put emphasis on them.. 

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5. Competitive Advantage The competitive advantage is clearly defined, products and services that you can’t find anywhere else. That’s why the customers keep coming back. They appreciate the experience. 6. Risk Management This strategy is not full-proof and like every business philosophy it is subject to risk. For example: if the market space is small and shifts in unexpected ways, the profits will be minimal.

[Audio] This is what companies should implement to ensure they remain competitive.. 

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The companies that implement this strategy should do market research so as to be in-touch with their customers. They should watch for trends so that they are able to change accordingly. They should also diversify their products along the same line. For example:  If they offer burgers, they should add French fries. This will retain their customers and acquire others. They should invest in continuous innovation to maintain their competitive edge. They should in strong brand identity. This is will create brand loyalty within the niche. They should channel their efforts to focused marketing. Target their particular niche of customers.

[Audio] These are the characteristics of the customers. One, they have specific preferences. Two, they are willing to pay premium prices. Three, they are loyal to their brand. Four, they make a small percentage of the total market.. 

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Specific Preferences The customers have specific preferences, needs and wants. They are look for tailored offerings. 2. Willing to pay premium The customers have no qualms paying a premium price to enjoy the extra value and convenience. 3. Brand Loyalty The customers tend to be loyal to the brand because meet their unique preferences consistently. 4. Limited size The customers are not many and only consist of a small segment of the overall market.

[Audio] 6. They have an in-depth knowledge of the products and services they want. Seven, they have a long-term relationship with their respective sellers. It is a kind of a partnership. Eight, they are okay with having limited options.. 

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6. In-Depth Knowledge The customers have a specific knowledge about the product or services they are purchasing. They know what attracts them to a particular product. 7. Long-Term Relationships Companies  implementing the focused differentiation strategy seek to create a strong long-term relationships with their customers. This happens when the customers trust the brand. 8. Okay with limited Choices Customers are okay with having few choices within their niche as they are after quality and uniqueness.

[Audio] The advantages of this strategy include: one, good profit margins. Two, strong brand loyalty. Three, product expertise. Four, reduced competition. Five, customization of the products.. 

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1. Good Profit Margins This is because they sell products and services at a premium fee. 2.Strong Brand Loyalty The customers strongly identify with the brand because it caters to their specific needs and preferences. They create a strong relationship over time. 3. Product Expertise The company develop a great knowledge about their area of expertise. They invest in continuous research to improve their product. 4. Reduced Competition Because they have loyal customers it discourages investors from opening new business along the same line.  5. Customization The products can be further specialized according to the needs of the customers.

[Audio] Disadvantages include: one, limited market size. Two, market volatility. Three, high costs of development and maintenance of the product. Four, limitation by customers and finally Customer Dependence.. 

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Limited Market Size It only serves a small niche of customers which limits the customer base. 2. Market Volatility Market are liable to changes: changes in customer preferences, trends etc. These may affect the profit margins greatly. 3. High Costs The development of a unique quality product is usually very expensive. This can be a problem if the profit margins are low. 4. Limitation by competitors If a huge well established takes over that limited unique product, the brand is in risk of being overrun. 5. Customer Dependence It relies heavily a small segment of the market. This is a recipe for disaster if the customers behaviour, needs are preferences change.

Generic Business Strategies

Our focus today is Focused Differentiation which is one of the generic business strategies.

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Focus differentiation involves offering a unique product or service to a narrow niche of potential customers

It leverages uniqueness and targeting sales strategy to a small niche.

Example is the rolex company which sells unique luxury watches to the elite.

I have highlighted certain lines to put emphasis on them.

This is what companies should implement to ensure they remain competitive.

These are the characteristics of the customers

Two, they are willing to pay premium prices

Four, they make a small percentage of the total market.

They have an in-depth knowledge of the products and services they want

Seven, they have a long-term relationship with their respective sellers

Eight, they are okay with having limited options.

Three, high costs of development and maintenance of the product

Four, limitation by customers and finally Customer Dependence.

Generic Business Strategies

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