The two main competitive strategies discussed earlier relate more to the broad consumer market.
In contrast, a competitive focus strategy is aimed at a narrow circle of potential customers. For example, goods are supplied to a regional market and are targeted exclusively at it or at a small group of consumers.
The focus strategy is chosen by those companies whose resources are quite limited. They understand that it will be difficult to break into a wide market, so they strive to achieve leadership under certain restrictions.
The advantages of this strategy:
It's fairly easy to create a positive image for a company that serves a small audience.
It is possible to combine and cash app database successfully apply the techniques of price leadership and product leadership strategies.
Cons:
If there is increased interest in a product, powerful competitors may appear that will be difficult to deal with.
A forced reduction in the price of products produced by companies that use a price leadership strategy.
Expansion is possible, but in this case there is a high probability of losing the specific properties of the product and its relevance to consumers.
A focused competitive business strategy begins with an analysis of the needs of a narrow circle of clients for whom the goods will be manufactured and supplied. The collected information is transferred to production, where work on specialized products is launched. If they have decent quality and an acceptable price, then the demand for them is higher than for competitors. As a result, the company's management will see how the loyalty and solvency of clients have increased.
Having settled on a specific market segment, the company then follows one of the two strategies already mentioned: it builds its work on cost leadership or chooses broad differentiation. Let's consider these options.
Focus on costs
By choosing this path, the company must reduce costs to a minimum by focusing only on its own narrow target market.
An example of this is Papa Murphy's - the fifth largest pizza chain in America. This unusual establishment only makes the dish up to the baking stage. The buyer can make his own flatbread with filling.
Porter's Competitive Focus Strategy
The company does not install stoves, ovens and other baking equipment. It does not need to equip the halls, think over the design of furniture, and then purchase all this. But the consumer ultimately gets a quality restaurant dish at an affordable price.
Focus on differentiation
By focusing on differentiation, the company adds value to its products, which are likely to be highly valued by a certain market segment. In this case, original characteristics, special production technologies, unique design and responsible employees are still highly valued.
Tyrrells is a British potato chip manufacturer owned by KP Snacks since 2016. The US company acquired Tyrrells for £300,000,000. The price is high, but the product can be called unique. They produce natural chips, without additives and flavor enhancers. Vegetables and potatoes for cooking are brought exclusively from the countryside of Herefordshire (in England). Snacks are made by hand, not on a conveyor belt, in small batches for wealthy customers. Naturally, interest in such products is justified.
Rolls-Royce is an English company, a division of BMW AG, specializing in the production of luxury cars. Such cars are made for wealthy people who want to stand out from the crowd. The manufacturer develops a new unique design of the car. Skin tones and dozens of other characteristics are adapted for each Rolls-Royce.
According to the author, the above-mentioned basic competitive strategies of Michael Porter can be combined, but only in exceptional cases and for a short period of time. An example of such a combination is IKEA. The Dutch company is definitely a leader in costs. Almost all of the company's slogans promote savings, for example, a commitment to self-assembly of furniture. At the same time, IKEA successfully follows the differentiation strategy, building entire rooms and labyrinths of rooms in stores.