Sunday, January 17, 2010

Focus Competitive Strategy

Focus competitive strategy is when a company focuses on a particular segment. In the book, we previously learnt about Niche marketing. Focus competitive strategy is a form of niche marketing. This type of strategy suits those companies which have few resources and they cannot afford to target many different segments. However, such a strategy is risky because if other big companies decide to enter the niche market, the small company with the focus strategy will be in big trouble.

Apple is a good example of focus competitive strategy. It focuses on research and development, making it the industry trendsetter. For the company using focus strategy, a high price will be beneficial for that company because the consumers will be prepared to pay a higher price for the unique product being provided by the company.

Many companies start as nichers and then later on they diversify into other segments. For example, southwest airlines started as a nicher and then it became a much bigger company.