Differentiation Strategy

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Differentiation Strategy

By | November 2012
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The next option is a broad differentiation strategy providing products or services that offer benefits different from those of competitors and that are widely valued by buyers. The aim is to achieve competitive advantage by offering better products or services at the same price or enhancing margins by pricing slightly higher.

Differentiation may be achieved in a number of ways. The product may incorporate a more innovative design, may be produced using advanced materials or quality processes, or may be sold and serviced in some special way. Often, customers will pay a higher price if the product or service offers a distinctive or special value. Differentiation strategies offer high profitability when the price premium exceeds the costs of distinguishing the product or service. There are some companies that have successfully pursued differentiation strategies, such as Mercedes and BMW in automobiles, American express in travel services, Bose in stereo speakers,

Along with cost leadership, IKEA also offers some differentiated features that appeal to its target customers, including Numerous ways in which differentiation can be achieved:
Product Features
It is a way in which firms can attempt to influence customer perceptions. It is to modify the objective properties of the products or services they sell. IKEA target is to designing beautiful products that are inexpensive and functional. * Apple: It incorporates superior design in all its products so that these stand out from its competitors’ products. Apple’s design philosophy is based on minimalism. It removes clutter both from its products’ outward appearance as well as from their user interface. It is no coincidence that Apple users rave about the exceptional user interface of their iPads, iPods or iPhones. In addition, Apple tries to exert control over the users’ experience with its products. So, apart from the hardware, the company also develops the software so that the user has the best possible...
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