Focus strategy

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Businesses using the focus strategy intend to

Serve the needs of a narrow customer segment better than their needs can be met by the firm targeting its products to the broad market.

A focus strategy is an

Action plan the business develops to produce goods or services that serve the specific market segment.

Focus Cost Leadership

An intention to produce goods or services for a narrow market segment at the lowest cost.

A focus strategy works best when:

• It is costly or difficult for multi-segment rivals to serve the specialized needs of a specific niche • No other rivals are concentrating on same segment • A business's resources do not allow it to go after a bigger market segment • An industry has many different segments, creating more opportunities to focus

The premise of a focus strategy is based on three components:

• Needs of a group can be better served by focusing entirely on it • Focusing on a specific group usually increases customer loyalty • A business can sometimes garner an increased price as there may be a lack of substitute products/services.

To successfully use either focus strategy,

a business must perform many of the value chain's primary and support activities in ways that enable it to create more value for a narrow group of target customers than competitors.

focused differentiation strategy

The intention to produce goods or services that a narrow group of customers perceive as being unique in ways that are important to them.


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