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john
Student (University)
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What are the Risks of a Differentiation Strategy?
What are the risks involved when using differentiation as a competitive strategy? Why?
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Welcome to the Competitive Advantage best practices. The topic being discussed here is: "What are the Risks of a Differentiation Strategy?".
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Jaap de Jonge
Editor, Netherlands
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Pitfalls of a Differentiation Strategy
In my opinion, the main risks of a differentiation strategy are:
1. Differentiation is not sustained, because
1a. Competitors imitate.
1b. A base for differentiation becomes less important to buyers.
2. Cost proximity is lost (overly expensive).
3. A differentiation focuser achieves even greater differentiation in the same segment.
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Joao Viggiani
Consultant, Brazil
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Keys to Differentiation Strategy
Inovation is one key to sustain a differentiation strategy.
Services is another key.
But, most of all, go back to Porter: "strategic positioning means performing different activities from rivals or performing similar activities in different ways".
With only 7 keys we have millions of different musics. Why not with business activities?
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Bernhard Keim
Business Consultant, Germany
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The Risks of Not Differentiating
The risks of differentiation can be reduced by testing the customers you have in mind. And, beyond that, what I also kno...
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