Outperforming competitors are one of the central strategic objectives of any company without regard to a sector or industry of operation. To achieve this goal, firms deploy numerous strategies. One of them is referred to as a broad differentiation strategy. This approach is based on accumulating the competitive potential of a company by differentiating its products or services. The primary idea is to introduce innovations to attract the attention of a broad spectrum of consumers and satisfy a variety of needs (Thompson, Peteraf, Gamble, & Strickland, 2015). The foundation of this technique is a thorough investigation of customers’ preferences aimed at finding out what functions and options are desirable and should be added to a proposed product or service. If a broad differentiation strategy is successful, it helps to establish a premium price for a product or service, increase sales, enhance profitability, improve brand image, and gain consumer loyalty (Thompson et al., 2015).
There are numerous examples of productive implementation of this strategy. This paper will focus on two companies that deploy this approach – Apple and Starbucks. Apple is known for unique and innovative products. These two features differentiate it from other companies that produce computers and smartphones. Still, the primary benefit of Apple is turning the manufacturing process into art and focusing on constant improvement to preserve users’ loyalty and win the hearts of new consumers. Estimating it in terms of broad differentiation strategy, the company manages to satisfy a vast array of needs from design to prestige and functionality by providing unique products and services (Wang, 2013).
As for Starbucks, it as well selected a broad differentiation strategy. Unlike Apple, Starbucks pays significant attention to a range of offered products and services instead of innovations. For instance, it is known for opening numerous unique coffee shops, the superior quality of products and services, different entertainment initiatives, broadening and refreshing menus on a timely basis, offering an option of virtual financing, etc. (Thompson et al., 2015; Wang, 2013). Moreover, Starbucks differentiates menus by adding region-specific beverages and meals to satisfy the tastes of people around the globe, e.g. Chinese and Korean menus in the Eastern regions (Moon, 2010).
Nevertheless, to sustain the best cost producer strategy, it is imperative to keep in mind two crucial elements. First of all, it is vital to focus on the customer value proposition. This constituent of the strategy is, in fact, a plan for winning customers that are based on finding out primary preferences that people are willing to pay for and establishing a relevant price level to meet consumers’ needs. It involves a thorough analysis of the market and target audience. Another important element is the profit formula. It is a plan for structuring costs that will help a company to deliver the customer value proposition (Thompson et al., 2015).
This constituent is essential for determining an acceptable structure of cost that will help gain a desirable level of profits and satisfying consumer needs. In other words, the profit formula identifies how effectively a company meets users’ needs and their own needs for revenues. Once a firm outlines these elements, it obtains a sufficient background for selecting a strategy that is most appropriate for managing available resources and reaching set objectives. Still, it should be noted that both elements and strategies are dynamic and evolve (Thompson et al., 2015).
References
Moon, H. C. (2013). Global business strategy: Asian perspective. Hackensack, NJ: World Scientific.
Thompson, A., Peteraf, M., Gamble, J., & Strickland, A.J. (2015). Crafting & executing strategy: The quest for competitive advantage: Concepts and readings (20th ed.). New York, NY: MCGraw-Hill Education.
Wang, J. (2013). Intelligence methods and systems advancements for knowledge-based business. Hershey, PA: Information Science Referencing.