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FOCUS OR NICHE STRATEGY -Is directed towards serving the needs of a limited customer group or segment.

-Concentrates on serving a particular market niche, which can be defined geographically, by type of customers, or by segment of product line. Ex. Globe account for OFW, reviewer for nursing students. Niche- synonymous to focus, is used to refer to a different or unique kind of market w/c is usually limited in number. KEYS TO SUCCEESS IN FOCUSNICHE STRATEGY A. Choosing a market niche where buyers have distinction preferences, special requirements, or

Unique needs. b. Developing unique capabilities to serve needs of target buyer segment. APPROACHES IN FOCUS/NICHE STRATEGY 1. Achieve lower costs than rivals in serving the segment. 2. Offer niche buyers something different from rivals-a differentiation strategy. EXAMPLES OF FOCUS STRATEGY A. E-BAY- ONLINE auctions. B. Porsche- sports cars.

WHAT MAKES A NICHE ATTRACTIVE FOR FOCUSING? 1. Is the market big enough to be profitable and offers good potential. 2. The niche is not crucial to success of the other players particularly the industry leaders. 3. it is costly or difficult for multi-segment competitors to meet specialized needs of niche members. 4. The focuser has resources and capabilities to effectively serve an attractive niche. 5. Only a few other rivals are specializing in same niche.

6. The focuser can defend against challengers via superior ability to serve niche members. BEST COST PROVIDER STRATEGY -combines strategic emphasis on low-cost and differentiation. -Higher Attributes + Low Price = Best Cost Provider Strategy CHARACTERISITCS 1.Make an upscale product at a lower cost. 2.Give customers more value for their money. OBJECTIVES OF BEST-COST PROVIDER STRATEGIES. 1. DELIVER SUPERIOR VALUE BY MEETING OR EXCEEDING BUYER EXPECTATIONS ON PRODUCT

ATTRIBUTES AND BEATING THIER PRICE EXPECTATION. 2. BE THE LOW-COST PROVIDER OF A PRODUCT WITH GOOD-TO- EXCELLENT PRODUCT ATTRIBUTES, THEN USE COST ADVANTAGE TO UNDERPRICE COMPARABLE BRANDS. COMPETITIVE STRENGHT OF BEST-COST PROVIDER a. Its competitive advantage comes from matching close rivals on key product attributes and beating them on price.

b. Success depends on having the skills and capabilities to provide attractive performance and features at a lower cost than rivals. c. Best-cost-provider can often out-compete both a low-cost provider and differentiator when buyers belong to the lower strata. d. Standardized features/attributes will not meet the diverse needs of buyers e. Many buyers are price and value sensitive.

Ex One of the best examples would be Toyota Lexus. Toyota had been doing various researches and experiments on producing a Luxury vehicle which can outperform Benz, BMW, Cadillac and Volvo. (A vehicle with higher attributes/ features than Benz, BMW) So the ultimate result was the introduction of Lexus. But the main important thing was that they could sell this Luxury Vehicle at a lower price compared to its main competitors Benz and BMW. This is mainly due to their Lean Management (Keeping wastage at the minimum level and increase the efficiency)Toyota has been recognized as the best company for practicing Lean Management at the best possible level. According to Toyota

Performance of Lexus = Performance of BMW 5 series car but the price of Lexus = BMW 3 series car price. In this example the strategy was to offer a product with high attributes at a lower price (Lexus) - Low Cost Provider Strategy Ultimate result was the advantage achieved by Toyota over and above its competitors -BMW, Benz

Exercise The business that Leapfrog entered is the preschool electronic learning market. With its LeapPad product, it claims to have a product that is a toy in its shape, but an educational product in its soul. Appealing to parents who want the preschool years to be wellspent, the product also appeals to children. Our worst nightmare was that kids would pick the thing up, play with it for a few minutes, and forget about it, says Jim Marggraff, Executive Vice President for Content who directs all created design. Clearly that didn't happen-so far the company has sold more than 8.6 million LeapPads. Guide questions: What kind of generic strategy Leapfrog used? Why? 10pts Reading Assignment: Offensive strategies; frontal, bypass, etc.