3. DIFERENCIACIÓN

7/28/2019 3. DIFERENCIACIN

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1. Primary determinant of a firm's profitability is the attractiveness of

the industry in which it operates.

2. Secondary determinant is its position within that industry.

Even though an industry may have below-average

profitability, a firm that is optimally positioned cangenerate superior returns.

A firm's strengths ultimately fall into one of two headings:

cost advantage and differentiation.Michael Porter


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Low cost producer in an industry for a given level of quality.

The firm sells its products either at average industry prices to earn a profit higher

than that of rivals, or below the average industry prices to gain market share.

In the event of a price war, the firm can maintain some profitability while the

competition suffers losses.

Even without a price war, as the industry matures and prices decline, the firms thatcan produce more cheaply will remain profitable for a longer period of time.

The cost leadership strategy usually targets a broad market.

Success because of Internal strengths:Access to the capital required to make a significant investment in production assets; this

investment represents a barrier to entry that many firms may not overcome.

Skill in designing products for efficient manufacturing, for example, having a small component

count to shorten the assembly process.

High level of expertise in manufacturing process engineering.

Efficient distribution channels.

Cost leadership


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Concentrates on a narrow segment and within that segment attempts to achieve

either a cost advantage or differentiation.

The premise is that the needs of the group can be better serviced by focusing entirely

on it.

A firm using a focus strategy often enjoys a high degree of customer loyalty, and this

entrenched loyalty discourages other firms from competing directly.

Success because of Internal strengths:Able to tailor a broad range of product development strengths to a relatively narrow market

segment that they know very well.

Focus Strategy


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Development of a product or service that offers unique attributes that are valued by

customers and that customers perceive to be better than or different from theproducts of the competition.

The value added by the uniqueness of the product may allow the firm to charge a

premium price for it.

The firm hopes that the higher price will more than cover the extra costs incurred in

offering the unique product.

Because of the product's unique attributes, if suppliers increase their prices the firm

may be able to pass along the costs to its customers who cannot find substitute

products easily.

Success because of Internal strengths:Access to leading scientific research.

Highly skilled and creative product development team.

Strong sales team with the ability to successfully communicate the perceived strengths of the

product.

Corporate reputation for quality and innovation

Differentiation Strategy


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Risks associated with a differentiation strategy:

Imitation by competitors

Changes in customer tastes


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high

low


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high

low


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Vertically differentiated

products unambiguously differin quality

Horizontally differentiated

products vary in certain productcharacteristics to appeal to

distinct consumer groups


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Is based on the consumer agreed-upon levelof quality which is expected as a minimum

before they are willing to pay to purchase a

product.


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As recommended by ANITA ELBERSE

HBS PROFESSOR


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1. Select a product or service and pick three or more companies that produce the

material or provide the service.

2. Take a piece of paper and draw one vertical line that splits the paper vertically and

another line drawn horizontally which also splits the paper so that they visually look

like a 'plus sign'.

3. Create two questions about the product or service to ask consumers. The question

should directly ask questions about how company a's product compares to company b's

to company c's. A minimum of six people should be asked the questions. The vertical

axis of the paper drawn on in step two will represent one of the two questions and the

horizontal axis the other question. This represents the perceptual map.

4. Plot the answers to the two questions on the perceptual map labeling the company's

name where the consumer's answer to the question best fits the perceptual mapquestions. For example, a question might be, do you find Ford or Chevrolet vehicles

more sporty? The top of the vertical axis would be labeled sporty and the bottom

labeled less sporty. You would label the top of the axis Ford with the number of

answers that were that manufacturer and put the number of Chevrolet answers in the

applicable spot on the perceptual map.


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3. DIFERENCIACIÓN

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