Differentiation strategies are not about pursuing uniqueness for the sake of being different. Differentiation is about understanding customers and how GM 's product can meet their needs. To this extent, the quest for differentiation advantage takes us to the heart of business strategy. The fundamental issues of differentiation are also the fundamental issues of business strategy: Who are GM 's customers? How does GM create value for them? And how does GM do it more effectively and efficiently than anyone else?
Because differentiation is about uniqueness, establishing differentiation advantage requires creativity – it cannot be achieved simply through applying standardized frameworks and techniques. This is not to say that differentiation advantage is not amenable to systematic analysis. As have observed, there are two requirements for creating profitable differentiation. On the supply side, GM must be aware of the resources and capabilities through which it can create uniqueness (and do it better than competitors). On the demand side, the key is insight into customers and their needs and preferences. These two sides form the major components of our analysis of differentiation.
In analyzing differentiation opportunities, GM can distinguish tangible and intangible dimensions of differentiation. Tangible differentiation is concerned with the observable characteristics of a product or service that are relevant to customers’ preferences and choice processes. These include size, shape, color, weight, design, material, and technology. Tangible differentiation also includes the performance of the product or service in terms of reliability, consistency, taste, speed, durability, and safety. Image differentiation are especially important for those products and services whose qualities and performance are difficult to ascertain at the time of purchase (“experience goods”). These include cosmetics, medical services, and education.
By offering uniqueness in its...
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