The differentiation strategy is closel Competitive Advantage cannot be fully understood by considering an organisation in general. Below we illustrated a few examples in relation to an often differentiated product – women’s handbag. Coleman camping equipment offers a good example. Continued innovation and quality improvement a… Product differentiation means that your product has one or more distinct attributes that separate it from competitors. Posted October 11th, 2020. Reference – Crafting & Executing Strategy by Thompson McGraw-Hill, 18th edition ISBN # 9780078112720, Your email address will not be published. AVOID buying essays online or even googling for Coca Cola SWOT\’s or other blogs/strategic aspects as the worst thing that you can do is get a fail score in this comprehensive exam. advantages and disadvantages of differentiation strategy pdf. Required fields are marked *. Differentiation strategy 1. The product differentiation process may be as simple as redesigning of packaging to introducing a brand new functional feature in a product. Below are the disadvantages or risks of the broad differentiation strategy: Differentiating on an unimportant product feature that doesn't result in providing the best value to the customer; Too much differentiating the product like products' features exceed the customers’ needs; Cost leadershipimposes severe burdens on the firm to keep up its position, which means reinvesting in modern equipment, ruthlessly scrapping obsolete assets, avoiding product line proliferation and being alert for technological improvements. b) Choose the most appropriate one to recommend for the Coca Cola Company. By contrast, the differentiation focus and cost focus strategies are adopted in a narrow market or industry. A firm must have strong marketing capabilities and effective quality assurance. Q1. The focus strategy is one of three generic strategies that Professor Porter created at the time: cost leadership, focus, and differentiation. Pursuing a differentiation strategy requires a larger financial investment from the company, another weakness. Additionally, a differentiation strategy relies on effective and productive human resources. The company must use only one out of three competitive strategies. Cost Leadership and Differentiation. This will help the company to survive and minimize the risk, but if the company does not choose one of three competitive strategies, then there would be a loss of resources. In 2007, department store Dillard’s stopped carrying men’s sportswear made by Nautica because the seafaring theme of Nautica’s brand had lost much of its cache among many men. Some of thes… Your email address will not be published. A Cost Leader is where the company has … differentiation strategy A business strategy in which a company tries to gain a competitive advantage by providing a unique product or service, or providing a unique brand of customer service. The traditional method to achieve this objective is to produce on a large scale which enables the business to exploit economies of scale. Examples of Firms Pursuing a Differentiation Strategy ... strategy means that a firm is competing based on uniqueness rather than price and is seeking to attract a broad market (Porter, 1980). Tougher Work Load for Teachers Working with each individual according to his learning style means more work for the teacher, more time taken for each lesson and each child. Focused cost leadership is the first of two focus strategies. Advantages and disadvantages of Coca cola joint ventures to achieve diversification Order 100% Plagiarism Free Paper Now. Most famously, Starbucks offers all part-time employees that work at least twenty hours health insurance benefits, a benefit implemented by CEO Howard Schultz who watched his father struggle as an employee of companies that did not offer such benefits. Advantages and disadvantages of Coca cola joint ventures for diversification. The goal is to produce goods or services at the lowest possible cost by organizing every potential resource around the current production methods. They are well-positioned in the market with a plentiful amount of easy to access stores. Differentiation Strategy Prof. (Dr.) Nitin Zaware Prof. (Dr.) Nitin Zaware 1 2. Businesses looking to build a broad or focused differentiation strategy will need to produce or design extremely unique or distinctive products or services that create increased value for the consumer. They have done the trusty old SWOT analysis and listed their strengths and weaknesses. Advantages Of Product Differentiation. The product differentiation process may be as simple as redesigning of packaging to introducing a brand new functional feature in a product. Copyright © 2021 A+ Professional Essay Writing Services:- All rights reserved. These categories are: Starbucks employs a broad differentiation strategy. These are the target market (broad or narrow) and competitive advantage (low cost or differentiated). Perhaps Starbucks most impactful strategy is the time, effort, and financial resources that are invested into its employees – or partners as Starbucks has eliminated the word employees from its vocabulary. Companies can engage in diversification efforts by different means [mergers, acquisitions, joint ventures, strategic alliances, or international expansion].