Differentiation

Differentiation
Definition: is the act of designing a set of meaningful differences to distinguish the company's offering from competitor's offerings. Boston Consulting Group's differentiation opportunities matrix: Actually it is a competitive advantage matrix applicable to differentiation opportunities

Type of Differentiation
Four types of industries identified by BCG matrix are:
Volume industry: only a few but very large competitive advantages are possible. The benefit of the advantage is proportional with company size and market share. Example given - construction industry Stalemated industry: in this type there are only few opportunities and the benefit from each is small. The benefit is also not proportional to the size or market share.
Example: Steel industry - It is hard to differentiate the product or decrease its manufacturing cost.

Fragmented industry: in this type, there are many opportunities, but the benefit of each of them is small. Benefit does not depend on size or market share. Specialized industry: in this type, the opportunities are more and benefit of each opportunity is high. The benefit is not related to size or market share

Five Dimensions of Differentiation

Product Services that accompany marketing, sales and after sales services. Personnel that interact with the customer Channel Image