Organisation Differentiation Strategy
Organisational differentiation strategy is a group of instructions or policies that an organisation stipulates for the purpose of attaining a unique product or services in the market that will enable them achieve competitive advantage. This does not only concern with what the organisation take it as being different to what they offer but also to the eyes of the consumers in the market. In doing this, the organisation should consider the views of the clients and what they term as being different in regard to the way that the product fulfils their needs in the society.
This then calls for more non-standardized products in the market so that the consumers may get different products to fulfil their different needs in the market. The paper is entitled to look at the way in which an organisation can alter their existing strategy to differentiation strategy so as to attain sustainable competitive advantage in the market without many policies in place. To achieve this, one will have to understand various types of differentiation strategies present.
With this, we will be able to get what one has to consider while stipulating such a policy in an organisation for the reason of attaining a sustainable competitive advantage.
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In this, the paper will give examples of some organisation and the ways in which they have managed to address the considerations in place, thus understanding whether they have done it successful or not. Types of Differentiation Strategies There are various ways in which an organisation can attain the differentiation strategy in the market. In this, one can decide to change the shape of the commodity to be different from the rest in the market, size and even colour that they use in advertising their services and goods in the market.
In term of services, the organisation may decide to change their quality, performance and speed at which they serve their clients in the market. In this, they tend to be differentiated from other services in the market. With these, there are two main types of differentiation strategies that an organisation can decide to implement in their marketing and merchandise activity in the market (Kotelnikov 2001). These comprise of the cost differentiation strategies and the image or product strategies.
These will be discussed further so that an organisation may understand better the different types enabling them to get the proper type that suits the organisation depending on the type of service and goods that they are offering to the market together with the goal that they are aiming to achieve from the market. Image Differentiation Strategies In this type of strategy, the organisation tends to concentrate more on various elements of the product that will bring in a definite difference from the rest of the products in the market.
This normally concerns the size of the product that they produce to the market. It is to this reason that one may find it wise to produce a given product in different categories of size so that the clients in the market achieve their wants at any given time. At the same time, the organisation may realise the size of the commodity that does not exist in the market and try to come up with it so as to attend to the needs of the consumers that have not been dealt with in the market.
Other than the size of the product in the market, one may decide to concentrate on the quality of work that they offer to the consumers in the market (Thompson & Strickland 2003). In this, one may concentrate on improving the quality of the product and service that they offer to the consumers in the market so as to attract more clients to purchase their products and services in the market. In most cases, this type of strategy is implemented in a very dynamic market in such a way that the consumers in the market do need products that are of varied qualities, shape and size that can attend to their different needs in the market.
It is because of this reason that the Coca cola Company in the United States has attained its competitive advantage over the other soft drink companies worldwide. In this, they have focused so much on their brand name and advertised it to many of the international markets worldwide. Cost Differentiation Strategy An organisation may decide to be different from the rest in terms of their pricing policy for their products and services.
None-the-less, when doing this, one has to consider the impact that the price of the product will have to the consumers in the market. This is to the fact that, different people tend to interpret the price of the commodity differently. Some of them associate low priced product to poor quality and the high prices to better quality in the market. Thus before putting this type of strategy in place, one has to study the reactions of the consumers in the market so as to get the correct response to the strategy that they will implement.
Secondly, the organisation has to check on the ratio or difference in their prices compared to those of the competitors in the market; this is because the cost of any commodity in any country tends to be controlled by some of by-laws in the state, so they have to ensure that they do not go against the laws. So the organisation should make sure that they do not price their commodities too low or too high for the purpose of attaining market, this can result in violation of pricing laws in the market.
The organisation also has to check on the economic status of its target market. As the economy of the place tends to dictate the behaviour of the consumer towards the product or services in relation to the price that you would have offered to the market. It is believed that, a community with low economic status will tend to prefer product of low cost and thus the management has to ensure that they reduce their product costs so that they can win high number of consumers in the market. Considerations to Ensure Competitive Advantage
After the organisational management has decided on the type of strategy that they will use to attain the competitive advantages in the market, there are other points that they have to put into consideration for them to achieve their goals. The paper will go ahead and look at the main considerations that any organisation has to consider together with other points. Customers When considering the consumer on your strategy, there are goals and needs that the organisation has to fulfil with their strategy in place. In this they have to attain the compassion for the client perspective in the market.
This will aid them to get what the consumer needs from them in the market and thus providing them with what they expect. To this effect, the organisation will have attained the goal to the people in the market and thus attaining the competitive advantage after the implementation of the strategy. The organisation has to ensure that they attend to the needs of the clients in the market. In this, they have to consider that every consumer in the market will be after the unbiased method that they have used to attain better market for their product brand (Pike & Neale 2006).
In this, they will be ready to compare it with other brands so as to attain the best in the market and go for it. Thus before implementing any strategy, the organisation has to consider their targeted consumers and how they will react to the changes that they would have made to the product in whatever aspect. Different organisations comes up with different ways in which they tend to consider this element, this will be discussed later in the text when we will be dealing with the ways in which different organisations adapt the considerations into place.
Competition Being the key element for the change in strategy, the organisation has to consider it with total dedication so as to attain their goals. In doing this, they have to consider the current competition in the market together with the prospective for future competition that may exist in the market. This will make them get the strongest adjustment to their product to an extent that even if the competitor tries to adapt their strategy, they would have already attained their target in the market.
This is one of the best considerations that any organisation has to put in place before any alteration being implemented in their marketing strategies. This is to the fact that, it is easy to copy or adapt differentiation strategy of an organisation for the sake of competition in the market (Mintzberg, Ghoshal & Brian 2003). Thus, the organisation practicing this has to be on alert so that they get the first hand information on their line of concentration, this will help them to give the competitor a wide range even if they attempt to copy their strategy in the market.
Having considered the potentiality of the future competition in the market, they will be able to dictate the way in which their competitors will react and thus look for a suitable way to curb the problem when it arises. Alternative for the Manufactured Goods The organisation has to be able to consider the alternative product size, shape and quality that they are able to produce in the market to achieve the competitive advantage.
In doing this, the organisation will be attending to the areas that competitors may find loop holes in their strategies, and thus giving them no opportunity of challenging them in future. Lawful and Ethical Restraint The organisation has to consider the law and ethics that may hinder them in achieving their goal in the market (Noe, 2000). These include such things like, the perception of people in the market towards varied cost of commodities in the market, the lawful restriction that is in place that tends to guide them in pricing the commodity.
How They Have Been Addressed in Different Organisations Having looked at the major considerations that one needs to observe in implementing the differentiation strategy, it is clear that different organisation tend to implement them in different ways depending on what they have targeted to achieve from the market. From the above discussion, it is clear that the Mercedes-Benz automotives product has attained their competitive advantage over the other automotives using their cost and quality different value (Thompson & Strickland 1995).
The organisation has tried to improve the quality of the product to be much better that the rest in the market and thus calling for attention in the international market. Basing on the Asian paints, they have been able to attain the competitive advantage over the other paints in the market as result of their colour modification. The consumers are able to get the paint in varies colours tone and shades to the standard that they need it at compared to the standards of the other colours.
Basing on computer industries, the apple computers company have been able to achieve the competitive advantage over the other companies as result of the way in which they offer their services to their consumers in the market. The company has been able to upgrade their services in a very short time and thus enabling the consumers to attain all their needs from the same company. Other than that, the company has been able to reduce their product and service cost to a minimal compared to what other companies offer them.
The low price and better quality of products and services have enabled a good number of consumers to prefer their services as compared to the other computers companies in the nation. Conclusion In conclusion, we can say that differentiation strategy is the easiest and faster strategy to be implemented but stays for a shorter period of time in the market. This is to the fact that it is easy for the competitor to adapt the new differentiation strategy of an organisation disabling them to achieve the competitive advantage in the market if not well planned for.
Thus, it is advised that, for any organisation to implement this type of strategy, they have to study the competition in the market reference for future so that they can be able to plan for that time when it comes. Reference Thompson A. & Strickland A. 2003 Strategic Management Ideas13h Ed University of California McGraw-Hill/Irwin pp 163-175 Noe R 2000 Human Resource Management Achievement of Competitive Advantage 3rd Ed Irwin/McGraw-Hill pp 56-58 Journal of World Business 2003 University of California JAI Press Vol 38 pp 51-67
Mintzberg H Ghoshal S & Brian Q 2003 Strategy Procedure Concepts Situations 4th Ed Prentice Hall pp 121- 135 Pike R & Neale B 2006 Corporate Finance and Investment Judgment & Approaches 5th Ed Financial Times Prentice Hall pp 174-185 Thompson A & Strickland A. 1995 Strategic Management Ideas 8th Ed University of California Irwin pp 130-145 Kotelnikov V 2001 Differentiation Strategy Retrieved 10th March 2009 from http://www. 1000ventures. com/business_guide/differentiation_strategy. html