This document discusses strategies for differentiating a business from its competitors. It outlines several differentiation strategies including focusing on unique qualities, superior service, or more value. The document also discusses sustaining competitive advantages through difficult-to-imitate resources, activities, brands, or switching costs. Finally, it examines ways for a business to grow using Ansoff's Matrix, such as market penetration, product development, market development, and diversification.

1. Dare to be different
Building your differentiation strategy
Robert Farrell
Robert Farrell

2. .
STRATEGIC
CHOICES
What basis? Which direction? How?
Bases of competitive Strategy Methods for pursuing
strategy directions strategies
Generic Strategy Alternative growth The choices about
Decisions options & directions how strategies are to
be pursued
The choices as to how an The choices of products
organisation positions and markets available
itself in relation to to an organisation
competitors
Source: Adapted Johnson & Scholes 2008
Robert Farrell

3. Porter’s Generic Strategies
Robert Farrell

4. Differentiation Defined
The unique qualities, perceived or
real, of a good or service, that
distinguishes it from a
competing good or service
Robert Farrell

5. CUSTOMER VALUE MAP
PERCEIVED
VALUE
PRICE
Robert Farrell

6. What gives organisations a
competitive edge
 Controlling or having something others do not have
 Doing something better then other organisations
 Doing something others cannot do
 Designing competitive strategies to exploit their
competitive advantage
Robert Farrell

7. BOWMAN’S STRATEGY
CLOCK
Source: Johnson & Scholes:1993
Robert Farrell

8. Route 4: Broad Differentiation
 Key factors for successful differentiation
1) Indentifying and understanding the strategic customer.
2) Identifying key competitors
Offer products/services that create value to customers
Offer products/services not easily matched
Robert Farrell

9. Differentiation in practice
 Unique taste – Bailey’s with its various flavours
 Convenience – SPAR
 Superior service – FedEx
 More for your money –Dunnes Stores, McDonald’s
 Engineering design/performance – Mercedes Benz
Manufacturing quality – Audi
 Prestige - Rolex
Robert Farrell

10. Route 3: The hybrid strategy
 Seeks to achieve both differentiation and
low price relative to competitors
 Can be advantageous when
 Much greater volumes can be achieved than competitors, so that
margins may still be better because of a low cost base.
 Cost reductions are available outside of its differentiated
activities
 Used as an entry strategy in a market with established
competitors
Robert Farrell

11. Route 5:Focused Differentiation
 A focused differentiation strategy seeks to
provide high perceived product/service
benefits whilst justifying a price premium,
usually to a selected market segment
(niche) or small number of targeted
segments.
 e.g.Rolex & Killester Travel (sports holidays/breaks)
Robert Farrell

12. SUSTAINING COMPETITIVE
ADVANTAGE necessary to
 Need for the unique resources and core competencies
support their adopted strategy
 Create difficulties of imitation.
 Mix of linked activities (bundles) e.g. UPC TV, broadband,
phone.
 Imperfect mobility such that the capabilities that sustain
differentiation cannot be traded.
 Top pharmaceutical research scientist
 Star footballer
 Brands – difficult to imitate or obtain
 Switching costs
Robert Farrell

13. 4 WAYS TO GROW YOUR BUSINESS
Ansoff’s Matrix
Source: Johnson & Scholes1993
Robert Farrell

14. Gap Analysis
PROFITS
Where the company
wants to be
Current
Position GAP
Where the company is
likely to be without a strategy
change
TIME
Robert Farrell

15. 4 WAYS TO GROW YOUR BUSINESS
Ansoff’s
Matrix
`MARKET
PENETRATION
PROTECT/BUILD
Source: Adapted Johnson & Scholes1993
Robert Farrell

16. 4 WAYS TO GROW YOUR BUSINESS
Ansoff’s
Matrix
Source: Adapted Johnson & Scholes1993
Robert Farrell

17. 4 WAYS TO GROW YOUR BUSINESS
Source: Adapted Johnson & Scholes1993
Robert Farrell

18. 4 WAYS TO GROW YOUR BUSINESS
Ansoff’s Matrix
Source: Adapted Johnson & Scholes1993
Robert Farrell

19. Diversification
 Related diversification
 Where the product and market are still roughly in the same
industry e.g. Gillette
 Unrelated diversification
 based on the concept that any new business or company, which
can be acquired under favourable financial conditions and has the
potential for high revenues, is suitable for diversification
Robert Farrell

20. Why would you diversify?
1. Objectives cannot be accomplished with the present portfolio of
the firm.
2. Promises more profitability than business expansions.
3. Cash reservoirs contain more cash than that required for present
expansions.
4. Company has strong brands that could be transferred to the
products of other businesses.
5. With closely related business it opens new avenues for reducing
costs.
Robert Farrell

21. Strategic Planning Exercise (gap analysis)
1. Establish the 3 year objective that has to be
achieved
2. Produce forecast on basis of doing nothing
differently.
3. Establish the gap
4. Attempt to fill the gap
 Market penetration
 Look at what’s possible .
 Start with productivity.
 Main products – market growth/ market
share growth?
Robert Farrell

22. Conclusion
 Be better than competitorsin ways that
matter to your customers.
 Understand your customers
 Know and understand your competition
 Market research is key
Robert Farrell