Different Theories And Models That Argue For Or Against Differentiation

Our team decided to choose the “Broad Differentiation” strategy as the basic strategy for our company. We will attempt to differentiate our product line in several distinct dimensions. By providing products that are vastly superior and unique from our competitors and pricing the products with an affordable price, we can gain something that is beneficial for the company in the future, which is customers’ loyalty and awareness. We may change or modify our strategy for the next round depending how it performs against our competitors.

Differentiation strategy is generally reserved for companies with a clear competitive advantage. Companies such as Mercedes and Apple employ this strategy. Differentiation strategy is demonstrated when a company provides value to customers through unique unique features and characteristics of a company's products rather than by the lowest price (Open Learning World 2010).

When pursing a differentiation strategy, the focus of competition is to add unique features in order to

It has been held in the United Brands case that product differentiation acts as a barrier to entry. Product differentiation is the development or incorporation of properties such as pricing, style etc. that the intended buyers of a product perceive to be different from others and therefore desirable. In the instant case the product differentiation has been made by different annual fee for licence of patented product.

According to Porter (1985) a company can apply three generic types of strategies to protect itself while competitive force is a key issue of the management. To achieve this position a strategy based on competency must be accomplished

There are two schools of thought pertaining to how firms should choose the competitive strategy that best suits them. One is of the opinion that firms should choose one of the generic strategies and commit all resources to making it work. Porter belongs to this category. They believe that the value chain necessary for cost leadership is quite different from that of differentiation strategy and that while differentiation deals with better quality, cost leadership deals with lowering costs wherever possible.(DESS and DAVIES 1984) What porter articulated here is that there is need for strategic clarity.

In the text, the author mentions the similarity between Miles & Snow and Porter’s generic typology where the “prospector model in Miles and Snow emphasizes differentiation and the defender business typically emphasizes low cost” (Parnell, 2014, p. 197). Porter’s generic typology has both differentiation and low cost considerations in the model with the focus being based on economic conditions and economic influence. In light of the similarities, the difference between these two business strategies are set in their core beliefs and concepts. Miles and Snow present their four models from a “philosophical” approach to business strategy and display the models benefits through real time explanation. Considering the four conceptual strategies “prospectors, defenders, analyzers, and reactors” the first described as “prospectors” follow “a dynamic uncertain environment and maintain flexibility”, additionally prospectors are known to lead and thrive as a “first mover” (Parnell, 2014). Prospectors tend to not like their environment to change but channel their creativity to design new products for their business. The Porter’s generic typology that is similar is the aspect of product uniqueness or unusual products known as “differentiation strategies” (Parnell, 2014, p.184), and based on the aspect of specificity. In the article, “Strategy Choices of Potential Entrepreneurs” the author explains the benefits of Porter’s three generic models and states that many entrepreneurs employ

To attain competitive gain, organisations can differentiate their merchandise and services from their competitors they can also choose to lower their costs in order to compete with other contenders. By aiming their produces to a wide-ranging target, they are essentially covering most of the marketplace or if they choose, they can decide to concentrate on a narrower target within the market (Lynch 2003). While doing so may reduce their market range it essentially reduces their other competitors. Porter stated that there are three generic strategies that an organisation can follow to achieve competitive gain over other organisations. These are:

With differentiation strategy, it states the product or service which provided by enterprise should have uniqueness, which means enterprise can gain competitive advantage through satisfy consumer with their special needs. (Johnson, 2013) Therefore, according to this and the information in the case, it can be seen that Adnams conducts the strategy to produce unique product and service to gain competitive advantage, and Adnams receive many benefits from it. Moreover, the key function of differentiation is that it can help Adnams establish the customer loyalty to itself. Besides, it also forms a strong industry barrier to entry, which means it can limit the quantity of competitors, and make other competitors more difficult to share the market with Adnams. In addition, the actual operation of Adnams in differentiation strategy will be analysed in several

“A company can outperform rivals only if it can establish a difference that it can preserve.”(Michael E. Porter).

Michael Porter’s contribution to marketing is that the term competitive advantage to the country is utilized in the strategic management structure of organisations (Fix). For an endeavour the competitive advantage can be distinguished as the parts that constitutes the prevalent execution of the organization in the mean of benefit in correlation with the contenders of a certain firm. In competitive advantage, the focus of Porter’s view are as per the following (Jurevicius, 2013).

Differentiation strategy are competitive strategies which Tesco can use to make themselves different within the market, it can include Tesco’s establishing different features, benefits and services which standout to the customers. Differentiation strategy is the strategy which involves Tesco’s identifying their buyers most important demands and needs in relation to their products and making a way to suit that product to that buyers needs in terms of

Another generic competitive strategy is broad differentiation strategies. According to Thompson, Strickland, and Gamble, in “Crafting and Executing Strategy”, broad differentiation strategy is seeking to differentiate the company’s product offering from rivals in ways that will appear to a brad spectrum of buyers. A company attempting to succeed through differentiation must study buyers’ needs and behavior carefully to learn what buyers consider important, what they think has value, and what they are willing to pay for. Then the company has to incorporate buyer-desired attributes into its product or service offering

Competitive advantage is explained by Mahoney and Pandian (1992) as the function of industry analysis, organizational governance and the firm’s effects in the form of resource advantages and strategies. In order for a firm to be competitive it must adapt to the volatile business environment and through strategic management decisions establish a competitive advantage that will ultimately produce superior performance relative to its competitors (Akimova 2000).

According to Porter, strategies allow organizations to gain competitive advantage from three different bases: cost leadership, differentiation and focus. Porter calls these bases as generic strategies.