Benefits of Focus Strategy
Focus strategy is a form of marketing strategy where an organization concentrates all its resources mainly on expanding or entering a narrow industry segment or market. It is normally used where the organization knows a specific segment and it already has the products for competitively satisfying the set requirements. Focus strategy, a key part of other marketing strategies that include low cost and differentiation strategies, offers the following advantages.
1. Better consumer satisfaction
Through adopting the focus strategy, a firm ideally focuses on specific target markets. These are ordinarily distinct groups that have specialized requirements. It is believed that through focusing a company’s marketing efforts towards a narrow market segment and also tailoring the marketing to the specialized market, the company will better meet all the requirements of that specific market. Better marketing translates to better services that consumers will enjoy.
2. Benefits small businesses
The focus strategy is the best choice for small businesses as they customarily lack the resources for competing industry-wide. Furthermore, the targeted approach is also beneficial to a small business since large companies usually disregard small niches. The other reason why the focus strategy benefits small businesses is that the certain needs are very special such that other large companies opt not to cater for them.
3. Competitive advantage
A company using the focus strategy naturally looks for the competitive advantage by brand marketing and product innovation, instead of efficiency. The targeted market segments are less open to substitutes and this allows for high return on the initial investment. This is especially seen where the organization has the capability of identifying the preferences of narrow market regions, enabling it to better meet them than its other competitors.
Since a company addresses a significantly smaller marker area than other companies when using the focus strategy, the profits realized are also small.