WHAT IS FOCUSED OR NICHE STRATEGY?
* Focus strategy based on low-cost
* Concentrate on a narrow customer segment beating the competition on lower cost * Focus strategy based on differentiation
* Offering niche customers a product customized to their needs * Overall objective of both focus strategies is to do a better job of serving a niche target market than competitors * Keys to success
* Choose a niche were customers have a distinctive preference, unique needs or special requirements * Develop a unique ability to serve the needs of a niche target market What Makes a Niche Attractive?
* Large enough to be profitable
* Good growth potential
* Not critical to the success of major competitors
* Organization has the resources to effectively serve the niche * Organization can defend itself against challengers through a superior ability to serve the niche * No competitors are focusing on the niche
EXAMPLES OF FOCUS STRATEGIES
-eBay for online auctions
-Porsche for sports cars
-Horizon and Comair (commuter airlines) to link major airports with small cities -Jiffy Lube International, maintenance for motor vehicles
-Bandag – specialist in truck tire recapping
FIVE STAGES TO FULLY ADDRESS THE NICHE OPPORTUNITY
There are five stages to consider when attempting to address niche marketing opportunities. These stages are strategic planning, defining the mission and objectives, strategies and action, monitoring key projects and objectives, and organizational realignment. 1. Strategic Planning
Strategic planning encompasses many of the issues discussed above, including the assessment of market opportunities, as well as an inventory of internal resources, values, potential strengths/capabilities (addressed in more depth below), and any weaknesses/shortfalls of the current operation. In short, the overall strategy provides a “road map” to attaining the objectives of the operation and its owners, while staying true to their vision and mission. 2. Define Mission and Objectives
The mission is the operation’s statement about why it exists, and sets the tone of what the company and its products’ image should be at the very highest level of the operation. There should be a broad-based buy-in to this mission from owners, employees, other important stakeholders, and maybe even targeted customers. In essence, the mission explains the culture of the business to both internal players and external consumers. The goals/objectives start narrowing the mission into workable pieces and set a direction for where different elements of the business should or could be to effectively deliver on the mission of the operation. Although these goals should continue to be forward thinking and broad-based, stakeholders should be able to see directed resources, market-driven actions, and business activity changes that may emerge to support the strategic direction chosen by the operation’s management. 3. Strategies and Action
To begin taking specific actions, with timelines and measurable outcomes that will support the broader mission, strategies, and goals of the business, it may be most effective to develop a work plan. That plan should include a key personnel list, timeline for the activity, a list of resources or budget needed to execute the plans, and any other relevant information (partners, pertinent legal or regulatory issues, and connections to other pieces of the work plan). Although a sufficient level of detail on all the actions to be taken may seem overwhelming, it will provide a realistic inventory of what needs to be accomplished and divide the actions into small enough 1-4 units to facilitate timely action (rather than inaction due to being overwhelmed by the scale of larger goals of the company). Remember that actions are both effective and realistic steps to achieving the operation’s strategy. In short, this step requires the...