Question

Many small businesses prosper by sticking to niches in a market that are too small to attract the attention of large competitors. The key question to answer is if the business can identify a "niche" that is large enough to produce a profit, or if it can find a unique way to differentiate itself from the competition in a meaningful way. Conduct an online search to find a business that has found a way to differentiate itself from the competition. Add the link to your response and explain your findings.

Answer 1

In order to attain superior performance and attain competitive advantage, a business must have distinctive competencies. Distinctive competencies can take any of the following two forms: Differentiation Advantage or Relative Low-cost Advantage.

Differentiation Advantage occurs when customers perceive that a business units's product offering is of higher quality, involves fewer risks and outperforms products offered by competitors. If customers perceive a product or service as superior, they become more willing to pay a premium price relative to the price that they will have to pay for competing offerings.

Example of one such business that has found a way to differentiate itself from the competition is Apple.

​​​​​Apple Differentiation Strategy:

a) Product Design of Apple proved as a Hallmark of it's differentiation strategy. There were no similar consumer electronics products that included so many features in one distinctive, iconic package, at the time when Apple introduced iPhone, iPad etc.

b) Apple's Pricing strategy is another factor that differentiate it from it's competitiors. Steve Jobs’ vision for Apple was always to create a premier product and charge a premium price. Apple ensures a high quality user experience with it's features due to which customers of Apple are willing to pay a higher price for it's products.

c) Retail outlets is another significant contributor in Apple's differentiation strategy. While users can purchase computers, tablets and mobile phones from nearly any electronics outlet, Apple differentiates itself by providing limited quantities to big box retailers and focusing its retail efforts on its Apple Stores.

d) Another most important contributor to Apple's differentiation strategy is Brand Loyalty. The company's efforts toward building brand loyalty have allowed Apple to differentiate itself from Microsoft, Samsung and other competitors in its various areas.