What are the types of business strategy? Small businesses often use a product differentiation strategy when they have a competitive advantage, such as superior quality or service. For example, a small manufacturer of air purifiers may differentiate itself from the competition by its superior engineering design. Obviously, companies use a product differentiation strategy to differentiate themselves from their key competitors. However, a product differentiation strategy can also help a company build brand loyalty.
Compete on price to target a limited market. You may not be the brand with the lowest price overall, but you may be the lowest price relative to your direct competition. For example, Rite Aid may have more expensive soft drinks than Dollar General, but if it's priced lower than Walgreens, this is a cost-focused strategy.
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