Kids, in this module we are going to see, differentiation strategies, right. Given by, Michael
Porter under Generic Strategies. Now, in this particular strategy, we take an example of
Honda. Now, Honda is a believer of given superior quality. So they practice or implement
differentiation strategies. Let’s check what it is. Different strategies offer different degree of
differentiation. Successful differentiation can mean greater product flexibility, greater
compatibility and lower costs, improved service, less maintenance, greater convenience or
more features. A product development is an example of strategy that offers advantages of
differentiation. This strategy should be pursued only after careful study of the market and
the buyer’s needs and preferences. A successful differentiation strategy allows a firm to
charge higher price for its product and to gain customer loyalty because consumers may
become strongly attached to the differentiation features. Special features that differentiate
one’s product can include superior service, better spare parts availability, engineering
design, product performance, useful life or ease of use. A risk of pursuing a differentiation
strategy is that a unique product may not valued highly by the customers, right, to justify the
higher price. That’s the only biggest problem or the risk of this particular strategy. Another
risk is that, the competitors may copy, right, so again that is also a risk. Firms thus find
durable sources of uniqueness that cannot be imitated quickly by rivals.
Next we see, if a firm creates special features demanded by the customers who are willingly
to pay more, right, increases. 3 years warranty given by General Motor cars, longer life