Strategy Focus

The content of this strategy is to obtain (formation) competitive advantages and meet market position in a fairly narrow segment of the market (including product or geographic features). The choice of this strategy depends on the ability of the company to serve a narrow segment of the market with its specific requirements more effectively than competitors who focused on a broader range of needs.

Strategy Focus - a more profound differentiation of products manufactured by the company, or to achieve lower prices (costs) for the segment served. Sometimes both sides of the strategies are implemented simultaneously. With respect to individual market segments here are the same laws as in the implementation of key strategies, "leading for lowering costs (prices)" and "leading for product differentiation in" on the market in general [13, c. 203].

We must consider the schedule of benefits targeting specific needs or large production volumes when choosing a strategy focusing (Fig. 1.7).

In the course of selecting strategies focus with the focus on lower prices / costs is a situation where the competitive enterprise sector achieves lower prices compared to other markets served by the branch, that is an additional "experience curve", which describes the events in the market segment. It differs from the "Industrial experience curve" more "modest" production volume, but describes the activities of firms that pay more attention to the efficiency of production and marketing. This approach protects small businesses from a powerful industry enterprises for which size segment makes it difficult to compensate their relatively fixed costs.

Fig. 1.7.Graphic interpretation big- advantages and few large-scale production, which shows the relative merits of "focus strategy" [14, c. 262]

Focusing on the needs deeper differentiation leads a company that has chosen this type of focus, more nearly approach the individual production of some products that can not afford large enterprises.

Companies that chose a strategy of focusing, sometimes called "enterprise-Violentyev." This strategy is appropriate if:

· there is a clear separation of different groups of buyers who: have specific needs and use the product in different ways;

· absence of competitors that claim to service specific narrow segment;

· failure to use available resources on a broader segment;

· the presence of significant differences in size, rate of growth, profitability intensity of exposure of five competitive forces (by M. Porter), making some segments more attractive than others.

The strategy of focusing associated with certain risks in its application:

1) the ability of many companies in the industry, serving the whole market and find effective means of competition in the same segment, which the company aims;

2) greater dependence on the changing needs and preferences of consumers (see. Comments to model competition Omayi C.);

3) "peresehmentatsiya" market where the company may lose its segment due to the emergence of new competitors, products, changes in the needs of others.

4) implementation of the invention (innovation), which enables superior segment otherwise.

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