Hello all, Could someone please explain to me the difference between “cost leadership” & “cost focus”, and “differentiation” & “differentiation focus”? I’m having trouble figuring out the difference in meanings…
Cost Leadership - Walmart which targets mass market by making goods available at a lower cost. Cost focus - Family Dollar which provides products to poor urban American families who can not drive to Wal-Mart in the suburbs because they do not own a car Differentiation - Apple targets the mass market with its iPhone and iPod products with a differentiation strategy based on design, branding and user experience Differentiation focus - A shop selling expensive perfumes to high net worth clients only
Oh so the only difference is the size of the target market… thank you very much for the clear explanation!
You could say that but I could only think of the above examples. Other example in my mind: Differentiation - Furniture shop selling only wood products. (instead of steel, iron, plastic) Differentiation focus - Furniture shop selling only Mahogany wood
I am coming back over here because I felt I didnt give a proper answer. Think of not as a size of the market, but a sector/segment you focus on. Instead of the whole you are focusing on a part.