Focusing starts by choosing a market niche where buyers have distinctive
preferences or requirements. The niche can be defined by geographic uniqueness,
by specialized requirements in using the product, or by special product
attributes that appeal only to niche members. A focuser 's basis for competitive
advantage is either lower costs than competitors in serving the market niche or an
ability to offer niche members something different from other competitors. A focus
strategy based on low cost depends on there being a buyer segment whose
needs are less costly to satisfy compared to the rest of the market. A focus strategy
based on differentiation depends on there being a buyer segment that
demands unique product attributes.
Examples of firms employing a focus strategy include Tandem Computers
(a specialist in "nonstop" computers for customers who need a "fail-safe" system),
Rolls Royce (in super luxury automobiles), Apple Computer in desktop
publishing (Apple computers produce typeset-quality reports and graphics),
Fort Howard Paper (specializing in paper products for industrial and commercial
enterprises only), commuter airlines like Skywest and Atlantic Southeast
(specializing in low-traffic, short-haul flights linking major airports with
smaller cities 50 to 250 miles away), and Bandag (a specialist in truck tire recapping
that promotes its recaps aggressively at over 1,000 truck stops).
Using a focus strategy to achieve a cost breakthrough is a fairly common
technique. Budget-priced motel chains like Days Inn, Motel 6, and LaQuinta
have lowered their investment and operating cost per room by using a nofrills
approach and catering to price-conscious travelers. Discount stock
brokerage houses have lowered costs by focusing on customers mainly interested
in buy-sell transactions who are willing to forgo the investment
research, investment advice, and financial services offered by full-service
firms like Merrill Lynch. Pursuing a cost advantage via focusing works well
when a firm can find ways to lower costs by limiting its customer base to a
well-defined buyer segment.
Focusing starts by choosing a market niche where buyers have distinctivepreferences or requirements. The niche can be defined by geographic uniqueness,by specialized requirements in using the product, or by special productattributes that appeal only to niche members. A focuser 's basis for competitiveadvantage is either lower costs than competitors in serving the market niche or anability to offer niche members something different from other competitors. A focusstrategy based on low cost depends on there being a buyer segment whoseneeds are less costly to satisfy compared to the rest of the market. A focus strategybased on differentiation depends on there being a buyer segment thatdemands unique product attributes.Examples of firms employing a focus strategy include Tandem Computers(a specialist in "nonstop" computers for customers who need a "fail-safe" system),Rolls Royce (in super luxury automobiles), Apple Computer in desktoppublishing (Apple computers produce typeset-quality reports and graphics),Fort Howard Paper (specializing in paper products for industrial and commercialenterprises only), commuter airlines like Skywest and Atlantic Southeast(specializing in low-traffic, short-haul flights linking major airports withsmaller cities 50 to 250 miles away), and Bandag (a specialist in truck tire recappingthat promotes its recaps aggressively at over 1,000 truck stops).Using a focus strategy to achieve a cost breakthrough is a fairly commontechnique. Budget-priced motel chains like Days Inn, Motel 6, and LaQuintahave lowered their investment and operating cost per room by using a nofrillsapproach and catering to price-conscious travelers. Discount stockbrokerage houses have lowered costs by focusing on customers mainly interestedin buy-sell transactions who are willing to forgo the investmentresearch, investment advice, and financial services offered by full-servicefirms like Merrill Lynch. Pursuing a cost advantage via focusing works wellwhen a firm can find ways to lower costs by limiting its customer base to awell-defined buyer segment.
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