Definition Concentration Strategy. Description.
In a Concentration Strategy a firm directs all or most
of its resources to a single market (for a single product, or for a single technology).
In this strategy, a company chooses to pursue a large share of one or a few
submarkets rather than chasing a small share of a large market. An inherent
risk belonging to this strategy occurs when the demand in the submarket suddenly
drops, or if a strong competitor enters the same submarket.
Note that a strategy of concentration still allows for a several different actions: the company can attempt to capture a big market share of the market it focuses on by:
- Increasing present customer's rate of usage.
- Attracting customers from its competitors.
- Interesting non-users in its products or services.
Also called Penetration Strategy. The opposite of
Diversification.
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Compare with: Diversification
| Economies of Scale
| Competitive Advantage
| Synergy |
Working Capital |
Penetration Pricing
| Core Competence
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