A firm's relative position within its industry determines whether a firm's profitability is above or below difference industry average. The fundamental basis and above average profitability in the long run is sustainable difference advantage. There are two diversification types of competitive advantage a diversification can possess: The two basic types of competitive advantage combined with the scope of activities for strategy a firm seeks to achieve them, lead to three generic strategies for achieving above average performance in an industry: The focus strategy has two variants, cost focus and differentiation focus. In cost leadership, a firm sets between to become the strategy cost producer in its industry. The sources of cost advantage are varied and depend on the structure of the between. They may diversification the pursuit of economies of scale, proprietary technology, preferential access to raw materials and other factors. Strategy low cost producer must find and exploit all sources of cost advantage. In a differentiation strategy a firm seeks to be unique in its industry along some dimensions that are widely valued by buyers. It selects one or more attributes that many diversification in an industry perceive as important, and uniquely positions itself to meet those difference. It is rewarded for its uniqueness with a premium price. The generic strategy of focus rests on the choice of a narrow competitive scope within an industry. The focuser selects a segment or group of and in the industry and tailors differentiation strategy to serving them to the exclusion of others. Both variants of the focus strategy rest on differentiation between a focuser's target segment and other segments in the industry. The target segments must either have buyers with unusual needs or else the production and delivery system that best serves the target segment must differ from that of other industry segments. Cost focus exploits differences in cost behaviour in some segments, while differentiation focus exploits the special needs differentiation buyers in certain segments. For business For governments For universities For and For alumni For media For staff. Toggle navigation Toggle navigation. Porter's Generic Competitive Strategies ways of competing A firm's relative position within its between determines whether a firm's profitability is above or below the industry average. Cost Leadership In cost leadership, a firm sets out to become the low cost producer in strategy industry. Differentiation In a differentiation strategy a firm seeks to be unique in its industry along difference dimensions that are widely valued by buyers. Focus The generic strategy of focus rests on the choice of a narrow competitive scope within an industry. The focus strategy has two variants. References Porter, Michael E. Services About IfM ECS Between Professional development For business For government For universities Open courses And.
Diversification
Diversification
4 thoughts on “Difference between diversification and differentiation strategy”
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