![]() Local charities are great examples of organizations using Focus strategies to get donations and contribute to their communities. Generic strategies apply to not-for-profit organizations too.Ī not-for-profit can use a Cost Leadership strategy to minimize the cost of getting donations and achieving more for its income, while one pursuing a Differentiation strategy will be committed to the very best outcomes, even if the volume of work it does, as a result, is smaller. The "something extra" that you add can contribute to reducing costs (perhaps through your knowledge of specialist suppliers) or to increasing differentiation (though your deep understanding of customers' needs). It's simply not enough to focus on only one market segment because your organization is too small to serve a broader market (if you do, you risk competing against better-resourced broad market companies' offerings). This makes their particular market segment less attractive to competitors.Īs with broad market strategies, it is still essential to decide whether you will pursue Cost Leadership or Differentiation once you have selected a Focus strategy as your main approach: Focus is not normally enough on its own.īut whether you use Cost Focus or Differentiation Focus, the key to making a success of a generic Focus strategy is to ensure that you are adding something extra as a result of serving only that market niche. Because they serve customers in their market uniquely well, they tend to build strong brand loyalty amongst their customers. The Focus StrategyĬompanies 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 low-cost or well-specified products for the market. Otherwise, they risk attack on several fronts by competitors pursuing Focus Differentiation strategies in different market segments. Large organizations pursuing a differentiation strategy need to stay agile with their new product development processes.
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