How to Increase Productivity by Focusing on Your Most Important Competitive Advantage

The market segments in which a corporation can successfully compete are identified by focus strategy. The strategy selects markets by balancing the company's competitive advantages with market characteristics. Focus is likely to result in the company's intended sales, revenues, and profits.

Competitive Advantage Simplified?

A competitive advantage is something that cannot be easily replicated and is exclusive to a company or business. This value is created internally and is what sets the business apart from its competition. A competitive advantage may stem from a better, more affordable or more enjoyable product or it may be another tangible or intangible asset.

Competitive advantages can be gained by having access to natural resources that rivals do not have, highly skilled workers, and other factors. Even if you enter the market with a completely original concept, it might not take long for competitors to catch up. The most potent advantage to use may be brand and reputation in industries like soft drinks.

To identify your competitive advantage over rivals, you must map out how you provide value or benefits to customers.

Focus Strategy Defined

A?focus?strategy?is?a?competitive?technique?for?withmarketing?and?sales?efforts?to?target?a?certain?market?niche. It?aims?to?take?advantage?of?untapped?or?underserved?portions?of?a?target?market. Focus strategies gain a competitive advantage by providing low cost or high quality to that segment. These?initiatives?may?boost?client?loyalty.

Harvard Business School's Michael Porter transformed how executives view competitive strategy. Porter's work on competitive strategy continues to have an impact on business executives and political figures worldwide. The following three tactics are available to your business to maintain a competitive advantage: strategic planning, innovation, and cost-cutting.

Simplified Competitive Strategies to Employ

1.?????Cost leadership is where a company offers a good or service at a lower price than anyone else.

2.??????Differentiation Strategy is when you offer a product that distinguishes itself from the competition.

?2. Focus strategy: This generic strategy can utilize either differentiation or cost leadership, but it declines to pursue the whole market for a particular product instead it focuses on a specific segment.

The Two Different Focus Strategies

The two primary categories of focus strategies are: One strives to outperform the competition by cutting costs, whilst the other pursues success through differentiation:

Cost focus strategy: Similar to a cost leadership strategy, a cost focus strategy focuses specifically on a certain market area. You can offer a cheaper price than your competitors by focusing on a particular market and employing an effective marketing plan. You can then leverage this price advantage to increase your market share.

Differentiation focus strategy: Rather than serving the entire market, this strategy targets a particular market sector with a specialized product. A luxury electric car would be a form of differentiation emphasis strategy if it provided considerable benefits in quality and functionality that justified the high prices.

Practical examples of Focus Strategies

Focus-based competitive strategy can be used by established brands aiming to grow or by new entrants into a market segment looking to establish themselves. Think about how businesses might apply this tactic:

Example 1: While some resorts and cruises appeal to couples without children, others try to concentrate on the singles market. These cruise lines can differentiate themselves from one another by offering competitive pricing or appealing to particular client preferences, such as room design and activity options.

Example 2: The cost focus strategy can be used by an ornament company that only markets to teenage girls because this group is unlikely to have the same level of disposable cash as adult jewelry buyers.

Which strategy will help your team improve business productivity?

A company's competitive edge is what distinguishes it from its rivals, whether it does so by guaranteeing larger margins, drawing in new clients, or increasing brand loyalty among current clients. Investors and creditors tend to be big fans of higher profits, a better growth profile, and fewer customer attrition.

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