Best Cost Focused Strategy By Thompson Et. Thompson Jr.

1411 Words6 Pages
• The competitors can try to make a distinctive product or release the improved version of the firm’s product. • Extensive differentiation can have a reverse effect of losing the current customers. • Differentiation is expected to be a continuous process. The current differentiation can become obsolete in the short run and the customer becomes more knowledgeable about the product and their needs and perception changes. 5.3.3 Focused Strategy The third strategy in Porter’s model is Focused strategy which is applicable for the firms’ that are operating in a narrow competitive scope or Niche Market. The strategy is applied based on the market segmentation. It can be segmented based on location, specific income group (usually high income group) or difference in the usage of the product. The driving force of the focus strategy is specialization in dealing with a particular markets needs and preferences which…show more content…
The major objective of Best cost provider strategy is to give the customers value for their money. This is an attempt to give the customers the products that exceeds their expectations at a price equal or lesser than the competitors. When a company can build on its core competencies and give enhanced product at a lesser price, it enjoys maximum profitability. It is hybrid model between low cost provider and differentiation strategy. This strategy adopts the best of both the strategies .i.e. economies in cost and at the same time differentiation in the features. This strategy works best in the market where the characteristics of price sensitivity and diversity in buyer’s preference exists. The biggest limitation of best cost provider strategy is failing in executing the strategy and falling prey for the limitations of both cost leadership and differentiation
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