What is the focus strategy? What is its role, types, etiology and how do we use it?


There are two things you want to think about while doing business, where do you want to go and how do you want to get there…and this is where the focus strategy comes in.

Basically, there are two types of strategies defensive and offensive course of action to gain a defensible position in the market. But companies can use three general strategies to achieve competitive advantage in the industry and perform above average.

These general strategies include;

  • Cost leadership strategy
  • differential strategy; And
  • Focus strategy

Most of the companies use one of the above strategies at one time but some companies by going the extra mile pursue more than one strategy and develop a different product at low cost. These companies are not able to last much longer.

In this article we will talk about focus strategy in detail.

When talking about a business, the term “focus” becomes more important. You must be very precise about every aspect of your business strategy. However, you need a focus strategy for your business. A focus strategy helps you stand out or differentiate yourself from your competitors in the industry.

What is the focus strategy?

Focus strategy or niche strategy, in the simplest term, means focusing on a narrow and specific segment of the market. The idea behind a focus strategy is to develop, market and sell a specific product to a specific group of customers.

Locate Huskisson In Irish, focus strategy is a marketing strategy that focuses on offering a product or service to a specific market segment. Firms often choose the option of concentration strategy to increase their penetration in a particular market segment. It helps companies create competitive advantage through effectiveness.

aSee also: Problem solving strategy

Why strategic focus?

A focus strategy can serve your business in multiple ways. For starters, this is the best approach to effectively understand the needs of your target customers. Focus strategy focuses on the specific needs of a specific group of customers.

When a company understands what its potential customers need, it can create a better and more valuable product. This not only generates regular profits for the business, but also helps businesses to establish a relationship of trust with their customers.

Moreover, customer loyalty is another advantage of satisfying a particular group of customers. When a customer is elated, they will develop a strong brand attachment. Once you have a happy customer, they will act as your brand ambassador, and this will be like “free marketing”.

Types of focus strategy

Focus strategy has two different types:

  1. Focused differentiation strategy
  2. Focused low cost strategy

Here is an explanation of both types with examples:

1. Focused differentiation strategy

Focused differentiation strategy is the first type of focus strategy that focuses on developing a distinctive product for a specific market segment. Enterprise focused on Differentiation strategy On a narrow customer segment that adds distinctive and customized features to the product.

Resorts are considered Breezes One of the best practical examples of a focused differentiation strategy. The company serves only couples without children. The company owns seven tropical resorts, and guarantees its customers a place free of children and noise. Couples who want to spend some time alone prefer these types of services.

Augustino Loprinzi Guitars & Ukuleles is another classic example of a focused divergent strategy. The company has been making high-end custom guitars for nearly 50 years now. Their handmade items range from $1,100 to $10,000.

Low cost focused strategy

A focused, low-cost strategy is often a popular choice for companies entering the market. These companies enter the market with a different product that offers more benefits to their target customers at a lower price. However, this does not mean that established companies cannot or will not pursue a low cost focused strategy.

Obviously, the newcomer cannot directly compete with the giants of the market. Therefore, these companies prefer to penetrate the market at low prices for their products. Of course, this strategy may be difficult to stick to in the long term, but it is very effective for newcomers.

Moreover, many companies choose Marketing strategy These are for different reasons. For example, some companies can easily satisfy some groups of customers with low-cost products.

Now what does that mean? Well, there are groups of customers who prefer low-priced products rather than high-quality ones. This market strategy is very prevalent in Arab countries, where the purchasing power of individuals is relatively low.

Papa Murphy’s, a highly respected company, is a classic example of a focused, low-cost strategy. Papa Murphy’s is the fifth largest pizza chain in the United States. The company operates differently from traditional pizza makers.

Papa Murphy makes pizza, but he doesn’t bake it. Customers buy pizza and bake it themselves. This approach is in the interests of both parties. The cost of operations becomes lower for Papa Murphy because the company does not need baking equipment, and requires less restaurant space. On the other hand, customers on a lower budget can enjoy pizza made in restaurants.

See also:Skeptical learning strategies

Focus strategy examples

Coca cola dapt

A very popular and perhaps universal example of a focus strategy is Diet Coke by The Coca-Cola Company. The company made this product specifically for people with diabetes or similar issues. Moreover, Diet Coke was an excellent addition for those who prefer low-sugar drinks.

Bubble Gum – Pata Pakistan

Bata Pakistan is one of the oldest and leading shoe manufacturers. The company introduced a special chip, “bubble gum,” for children. Bata has been making shoes for every type of customer since 1951, but bubble gum was a specific subdivision of Bata aimed at a specific group of customers (children).

Rolls-Royce

Well, Rolls-Royce is a name that is known to almost everyone. The iconic British company has established itself as one of the world’s leading luxury car manufacturers. The company specifically follows a strategy of focus as it deals only in the luxury automobile industry.

Why might a focus strategy fail?

There is no doubt that the focus strategy is one of the smartest Marketing strategies However, there are many risk factors associated with it. The focus strategy may not work for everyone in the long run, and here’s why:

The competition

Focus strategy focuses on creating a competitive advantage by offering something unique. However, it is very difficult to maintain this competitive advantage because competitors often come up with more developments and improvements, and you will have to keep up with them.

Moreover, when competition is high, profit margins often go down because they are divided among competitors.

Customer preferences

Unless it’s something mandatory for customers, they tend to blend in with the majority. However, customers with different preferences often begin to shift towards the preferences of the majority. However, if the company creates something different and mandatory for customers, it can last longer.

For example, Diet Coca-Cola is very suitable, which is probably the only option for diabetics.

What makes an industry suitable for application focus strategies?

Focus strategy seems to be an excellent and effective way to establish and develop your brand. But, is it easy to successfully implement what you have planned? Well, there are many factors to consider before choosing a focus strategy option.

profitability

It is easier to find smaller segments of the market where you can easily provide the service. But, does that mean that the segment you are looking for is also profitable? The primary objective of any business is to earn profits. Therefore, the portion you choose must be large enough to generate good and regular profits.

aSee also: What is the pricing strategy?

the growth

Another very important component that companies must consider in a focus strategy is the area of ​​growth. A company that does not grow over time may find it difficult to survive due to the highly competitive nature of the market. Therefore, before targeting a specific market segment, companies must assess the potential growth area.

Gain a competitive advantage

Developing a competitive advantage is like the backbone of a focus strategy or even any business strategy. The company targets a specific group of customers with a unique offer of excellence. If you can create something of real value for your customers, you will easily make it difficult for others to compete. This is why there are many low competition niches because it is hard to compete against the leaders in the industry.

sufficient resources

Having sufficient financial and other resources is equally important if you are going for a focus strategy. The costs may be higher in the beginning, and it may take more effort to market your product to your target group.

Moreover, companies must ensure that they are able to offer a product regularly.

If a company offers a rare commodity/product or a product made of rare ingredients, the company must ensure that it can obtain these ingredients regularly. If the company can effectively manage these resources, then the concentration strategy is a good choice.

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common questions

How can focus strategy be used?

Concentration is a strategy that enables a company to dominate a particular industry. Through focus strategy, your company focuses on a limited portion of the market. Companies that succeed with a focus strategy understand the customer dynamics and needs unique to their market niche.

What is a low-cost focus strategy?

It is a strategy where companies selling similar products in a particular niche lower their prices in order to increase revenue and gain a competitive advantage.

What is the best cost strategy?

The best cost strategy is one of increasing product quality while reducing costs. This strategy is applied to give customers “more value for money”. It is achieved by meeting customers’ expectations on the main features of the products. At the same time, lower prices are charged than competitors.

Give me examples of companies using cost leadership strategy?

The company you follow Cost leadership strategy To create a competitive advantage by achieving the lowest operating costs in its sector. Some examples of cost leadership include McDonald’s, Wal-Mart, Ryanair, Primark, and Ikea.

What is the product focus strategy?

Product strategy defines a company’s strategic vision for its product offerings by defining the products’ direction, how they will get there and why they will succeed. Product strategy enables you to focus on a specific target market and feature set, rather than trying to be everything to everyone.

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