Generic Strategies- Differentiation Strategy

In Differentiation Strategy, the products and services offered by a company are exclusive in ways that are valuable to the customers.  For a successful differentiation it is decisive that a customer should perceive offer as clearly distinct from that of competing product and services and they are expectant to pay a premium price for that. There are in substance two avenues for achieving this: either the product is superior in quality or innovation, or the company succeeds in building a distinct image through dexterous use of marketing tools. Differentiation can be based on number of waverings like broad product line (Campbell’s Soup), innovative design & performance (BMW), distinctiveness (Rolex), reliability (Johnson & Johnson), quality (Sony), superior service (Sony) and so on. But differentiation strategy does not guarantee competitive advantage. If the customer sees meager value in the unique product idiosyncrasy or competitors imitate the attributes, differentiation fails. For precedent Chrysler’s unique 60,000 mile bumper-to-bumper warranty did not produce lasting competitive advantage because Ford and GM copied it.

There are few prerequisite for implementing the differentiation strategy like strong marketing, functional integration, interminable development of new or improved services and likewise. Some of the several benefits of this strategy include, less tariff wars, ardent customer base, accretion of market share.


Contributed by:-

Jay Kumar Gupta

Section B

Strategic Management

Class of 2013- 15