differentiation
(noun)
A strategy focused on creating a unique product for a particular population.
(noun)
A strategy focused on creating a distinct product for a specific population.
Examples of differentiation in the following topics:
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Porter's Competitive Strategies
- Michael Porter classifies competitive strategies as cost leadership, differentiation, or market segmentation.
- Porter identifies two competencies as most important: product differentiation and product cost (efficiency).
- Differentiation is less tangible and easily defined, yet still represents an extremely effective strategy when properly executed.
- Differentiation refers to a firm's ability to create a good that is difficult to replicate, thereby fulfilling niche needs.
- Discuss the value of using Porter's competitive strategies of cost leadership, differentiation, and market segmentation
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The Challenge of Competition
- Avoiding the risks of competitive factors demands a strong understanding of operational efficiency (low cost), quality production, differentiation, and competitive advantage—or who you target and whether or not you have a cost or quality advantage (see figure below).
- Differentiation is a competitive tactic wherein companies approach certain niche needs within an industry to capture a segment of the market share.
- An example of differentiation might be cereal.
- The producers of these cereals use differentiation to capture a share of the cereal market: some brands focus on their organic nature, others their sugary appeal, and still others on being "cool."
- Describe competitive strategies such as low cost, differentiation, and internal competition and the role of the external competitive landscape in developing them
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Introduction to Red Ocean and Blue Ocean Strategy
- Identifying ways to create a new market, new niche or new differentiated strategy that creates more pie (as opposed to competing over an existing one) is a superior approach.
- The second figure illustrates this well, as the substantial value added lies in differentiating into new strategies to capture new market share as opposed to competing for established market share.
- The red ocean/blue ocean analogy itself is demonstrating significant staying power, and the observation that differentiation towards innovative business models (not strictly innovative products) is an important objective for future strategists.
- An excellent overview of the components of blue ocean strategy, particularly highlighting the trajectory of differentiation
- The difference between the two concepts, where red is more conservative and cost-cutting and blue is creative and differentiating
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Differences Between Strategic Planning at Small Versus Large Firms
- Because of this constraint, smaller firms most often use differentiation strategies that focus on innovation over efficiency.
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Global Strategy
- Differentiation strategies also enable economies of scope, either fulfilling different needs in different markets with a similar series of products, or developing new products based upon the needs and consumption habits of a new market.
- Differentiation as part of a global strategy will often require localization, as organizations must adapt to consumer tastes better to compete in the new country.
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Forecasting
- Following are a few critical points of differentiation and specific strategies to keep in mind when forecasting.
- One of the simplest points of differentiation between methods is the reliance on numbers for accuracy.
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Transactional Versus Transformational Leaders
- Differentiate between transactional leaders and transformational leaders in a full-range approach, particularly from a behavioral perspective
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Types of Decisions
- Differentiate between the three primary decision-making approaches: avoiding, problem solving, and problem seeking
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Benefits of Innovation
- Innovative employees increase productivity through by creating and executing new processes, which in turn may increase competitive advantage and provide meaningful differentiation.
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Differences Between Groups and Teams