In Differentiation Strategy, the products and services offered by a company are exclusive in ways that are valuable to the customers. For a successful differentiation it is decisive that a customer should perceive offer as clearly distinct from that of competing product and services and they are expectant to pay a premium price for that. There are in substance two avenues for achieving this: either the product is superior in quality or innovation, or the company succeeds in building a distinct image through dexterous use of marketing tools. Differentiation can be based on number of waverings like broad product line (Campbell’s Soup), innovative design & performance (BMW), distinctiveness (Rolex), reliability (Johnson & Johnson), quality (Sony), superior service (Sony) and so on. But differentiation strategy does not guarantee competitive advantage. If the customer sees meager value in the unique product idiosyncrasy or competitors imitate the attributes, differentiation fails. For precedent Chrysler’s unique 60,000 mile bumper-to-bumper warranty did not produce lasting competitive advantage because Ford and GM copied it.
Contributed by:-
Jay Kumar Gupta
Section B
Strategic Management
Class of 2013- 15
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