When it comes to business strategies, small businesses often rely on product differentiation when they have a competitive edge. This could be in the form of superior quality or service. For instance, a small manufacturer of air purifiers may stand out from the competition due to its superior engineering design. This type of strategy is used to differentiate the company from its key competitors.
In addition, a product differentiation strategy can also help build brand loyalty. Companies can also compete on price to target a limited market. They may not be the cheapest brand overall, but they may be the most affordable compared to their 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. Another type of business strategy is market penetration.
This involves increasing sales of existing products or services in existing markets. Companies can do this by offering discounts or promotions, or by increasing their marketing efforts. This type of strategy is often used when a company wants to increase its market share. Finally, companies may use a market development strategy. This involves introducing new products or services into new markets.
Companies can do this by expanding into new geographic areas or by targeting new customer segments. This type of strategy is often used when a company wants to expand its customer base.