Differentiation simply means using product features or functionality, innovation, brand image or customer service to make products and services more attractive to the potential consumer. Finally, create the product and implement the customer opinions about the kind of brand they wish to see. If a firm has a product that is high in demand the firm can price it higher. Now that you know what they are, you’re more likely to jump right over them! At these times, differentiation is more important than ever – and many organizations are aware of this. cost leadership, differentiation and focus which he suggested to be useful in securing a sustainable competitive advantage. Through differentiation at the product level, different brands from different businesses can easily be identified by the consumer. Identifying attribute of a product which are unique from competitors in the industry is the driving factor in the differentiation leadership strategy. I more often than not work with organizations whose separate capabilities or services are not unique at all. Porter’s (1980) put forward three generic strategies i.e. Pitfalls of a Broad Differentiation Strategy Relying on product attributes easily copied by rivals. Question: The Pitfalls Of A Differentiation Strategy Include. Leave your email to receive our newsletter, Get the news that matters from one of the leading news sites in Kenya, Drop your mail and be the first to get fresh news, Sales and marketing job description and salary in Kenya, Strategies in business that will lead you to success, Advantages and disadvantages of outsourcing, Best pricing strategies for your Kenyan business, Top 7 sources of business ideas & opportunities for entrepreneurs, Business Opportunities in Kenya: Cool Ideas to Get You Started, This is your key to successful business. As a product remains in the market for longer consumers become smarter about the prices and thus the premium charges being charged can no longer be sustained. The supposed differentiator is not unique. Sign up today! There is nothing as important in business as having a working differentiation strategy that you can apply in your business to make it stand out from the competition. Sounds like an open door right? Which of the following is not a potential pitfall of a differentiation strategy? Let us consider two examples here, NetJets (USA, Europe, and China) and another of DC designs (India.) Expert Answer 100% (1 rating) Previous question Next question Get more help from Chegg. Always understand your target audience before the choice of packaging. The outlined below are examples of differentiation strategy, pros, and cons. Crafting & Executing Strategy: Concepts and Readings with Connect (18th Edition) Edit edition. Over differentiation of products can lead to the exclusion of some consumers. It’s usual to be confronted by these questions, especially when you are in the business world. Inventions are not easy to come up with and require a budget to be implemented but it provides a unique product into the market. Thus a differentiation strategy helps create barriers to entry that protect the firm and its industry from new competition. This problem has been solved! Thus, Differentiation strategy is being used by all top companies for their products. However, this will definitely be of value for a company with global expansion plans. Which of the following is not a potential pitfall of a differentiation strategy? Buyer loyalty is common among handbag buyers. A poor customer relationship will lead to reduced profits while a good one will earn customer loyalty and ultimately lead to improved profits. 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