Introduction to Focus Strategy

Focus strategies are among three of Porter’s archetypal strategies, these three strategies are cost leadership, differentiation, and focus. All three strategies have one goal that is to deliver superior value to the customers. These strategies are based on certain principles of competitive advantage that is the delivery of superior value to customers with earning an above-average return for the company and the stakeholders. The overall focus is on delivering the best product to the customer better than anyone else in the market.

What is Focus Strategy?

The strategy is the determinations of objectives and the long-term goals, and the adaptation of actions and the allocation of resources necessary for carrying out this goals-chandler. A strategy is quintessential about the future in which there is uncertainty. A strategy is all about planning done for the next day or future and is expected to get the best results out of the strategy, it is important for us to cope up for the uncertain tomorrow and be prepared by preparing today against future possibilities. Strategy decisions are not easy yet complex, the expected future may arise from complex, social, technical, and other interactions and strategy made the previous day can save in the situation.

Steps to Achieve Success to Reach Goal Through Proper Strategy

Step 1

It requires the description of mission and objectives which should have the financial performance also of the organization, the description should be for a defined time zone. The strategic intent and stakeholder analysis are carried out the get the exact knowledge of mission and vision statements, a statement of strategic intent, and an assessment of stakeholders and stakeholders.

Step 2

It describes the scope of the organization in which the market they are looking to compete. It is important for the organization to make the right choices; the choices can be on the same channel but should not go beyond knowledge. The choices are also made if the organization’s focus is just the home market or it will go multinational, which can be product-market diversification.

Step 3

The articulation is important for the benefits that the firm can bring to itself and to its customers within the choice of the market they made. The organization should keep in mind that why should the customer buy the product? Why a customer should buy from you? What value can a firm make from making a proposition to the customer?

Step 4

There should be strategic logic behind competitive advantages, this can be strategies in two parts-one is positioning the logic in the market (market-based logic) which underpins the company’s competitive advantage ambitions.

Market Focus Strategy

If opting for this strategy then the organization is aiming for either low costs than competitors serving that market segment or an ability to offer niche members different from competitors. The focus strategy is basically selection buyers have distinctive preferences. When the strategy is based on buyers segment whose needs are less costly to satisfy comparatively in market then focus strategy is based on low cost. Likewise, when being a buyer on the differentiation segment, it requires a unique product. Focus strategy targets a specific segment of the market, there focus on a selected customer group, product range, geographical area or service line. It adopts a narrow competitive scope within an industry.

The aim of the Focus strategy is to grow market share through operating in a niche market, or market with less competition. The niche market arises of several factors like geography, buyer characteristics, product specification, and requirements. The success of a focus strategy is considered when an industry segment is large enough to have growth potential compared to its competitors. Larger and mid-sized firms use focus strategy in conjunction with differentiation and cost leadership generic strategy.

Competitive Strategies for Different Market Position

Five competitive strategies for a different market position are as follows-

1. Overall Low-Cost Provider Strategy

Making great efforts to achieve lower costs than competitors and appealing to broad number of customers, it goes on usually by under-pricing competitors.

2. Broad Differentiation Strategy

The strategy is to present a different product than that of rivals in a way that will appeal to a broad spectrum of buyers.

3. Focused Low-Cost Strategy

For this segment, the focus is put up on narrow market buyers and competition to buyers in the same scenario. The company must keep lower prices to serve niche members at a lower price than that of rivals in the market.

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4. Focused Differentiation Strategy

In this segment, the focus is on narrow buyers and competition to rivals by offering customized attributes to the niche members better than the rivals in the market.

5. Best Cost Provider Strategy

For this segment the focus is to provide the best product at a better cost, the value for the money is the focus by incorporating good to excellent product attributes at a lower cost than rivals. The focus is to have the lowest costs and prices when compared to competitors’ attributes they offer.

a) Low-Cost Leadership Strategy

This is based on the ability of the organization which can provide a product or service at a lower cost than its competitors. The assumption behind a low-cost strategy is that it acquires a substantial cost advantage over rivals that can be passed on to the customers to gain a larger profit or market share. A low-cost strategy can produce an advantage where a firm can earn a higher profit margin by selling products at the same market price as rivals. These products are aimed to be sold at a lower cost and appeal to an average customer in a broad target market. Sometimes these products have high standards and not customized to individual customers’ tastes, needs or desires. So, for a low-cost leadership strategy is followed by modifying products as possible, the firm can provide benefits from economies of scale and experience effects. Low-cost leadership strategies can also be applied in services-based business for benefits.

b) Advantages of Building a Low Cost

The presence of a strong market can allow the firm to able to convince the rivals not to start price wars within the industry, this means the low-cost firms can set the stage for pricing discipline within the market. It is easy for low-cost firms to keep competition out of the industry through their price-cutting power, this can be a substantial obstacle to firms contemplating entry into the industry.

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