Leg 4. From Melbourne to Hong Kong (V). Being Unique and Mightier for a Specific Crew!
Bonjour a Tous again!
Today we will finish the topic of Generic Business Strategies. The three top teams at the moment at the Volvo Ocean Race 2017-2018 are the US-Danish Vestas, the Chinese Dongfeng, and the Dutch Akzo Nobel. The teams are still in the Doldrums where there are no big tides, no fresh air (temperatures are high), and slow limited winds. I would like to share with you a video from one of the Teams about what is to sail during the Doldrums course conditions:
I will try to post videos from each of the sailing teams from now and then. To be fair, each of them has a spot on this blog. Without them, I wouldn´t be here doing a strategy race for you. Also, someone asked me which is my favorite sailing team? And guess which one? Alejandro Guillermo Lozano Artolachipi´s team is my favorite one!!! His team is the best one.
As far as my goal for today, let´s start, please!
As explained yesterday, companies that use Focus Strategies concentrate on particular niche markets and, by understanding the dynamics of that market and the unique needs of customers within it, develop uniquely either “low-cost” or well-specified products for that specific market. Because they serve customers in their market uniquely well, they tend to build strong brand loyalty amongst their customers. This makes their particular market segment less attractive to competitors.
Usually, focus strategies are scenarios chosen by international companies to “test” their business models within specific groups. But if we are not a multinational corporation, depending on your product or service, it is still key to decide whether if we will pursue a Focused Cost Leadership or a Focused Differentiation.
A Focus strategy needs to be accompanied by a “value added feature”. That “extra-mile” or “something extra” is easy to identify in “focused strategies” because you understand that market very well, and because of your deep understanding of customers´needs, is perfectly easy to increase differentiation. As a consequence of serving that market niche, you will differentiate and be unique.
Focused differentiation is the second of the two focus strategies. A focused differentiation strategy requires offering unique features that fulfill the demands of a narrow segment of clients.
Some firms using a focused differentiation strategy concentrate their efforts on a particular sales channel, such as selling over the Internet only. Others target particular demographic groups. For example, there are some Hotel Chains such as Sandals or Breezes Resorts, which pursue a specific segment: couples without children. The same applies to luxury brands such as Rolex, Rolls-Royce or Land Rover. Rolls Royce Phantom target is for a limited segment which can afford their high-end price (around US$450,000 dollars).
Focused Differentiation Strategies vary depending on your chosen segment. For example, with new airline regulations, for tech-savvy travelers, there are some specific new smart suitcases. Now, there is luggage equipped with GPS trackers, electronic check-in capabilities, and multiple charging ports. Smart Suitcases are designed for a specific narrow segment of clients.
Remember, the difference between a differentiation strategy and a focused differentiation strategy is that the first one involves offering unique features that appeal to a wide segment or variety of customers, meanwhile the second one, the products satisfy the desires of a narrow market. Thus, the unique features provided by firms following a focused differentiation strategy are often specialized.
If you wish to download the slides in PDF Format, click here: Eliescalante Leg 4 Focused strategies 2018.
The summary and conclusions information is included in the presentation above. I hope you enjoy all the examples of Focused Strategies there.
Just remember the following phrase when trying to implement a Focused Differentiation Strategy: Be Unique and Mightier to a Specific Crew!.
Thank you for reading me!.
Disclaimer: All the pictures or videos shown on this blog are not mine. I do not own any of the lovely photos posted unless otherwise stated.
Source References:
https://www.mindtools.com/pages/article/newSTR_82.htm
Eleonora Escalante Strategy 