b. Focus strategies
These involve a firm either offering a single product, or serving a single market segment, or both. The first strategy may apply in markets where there is a lot of product homogeneity, like steel production, or it may apply to small specialist firms, particularly in industrial markets. More commonly a firm will specialize in providing for a single market segment; TVR specializes in producing high- performance sports cars, as do Lotus and Marcos. Bose specializes in producing high-quality speaker systems. Tag Heuer specializes in producing high-quality watches, particularly for sporting people. However, the focus does not have to be on high quality, associated with benefit advantage. Firms like Asda, K-mart, McDonald’s and Woolworth have specialized in providing goods of ‘adequate’ quality at a low price. In this case, economies of scale and other cost reduction factors are of vital importance in yielding a cost advantage.