COST FOCUS
COST FOCUS
The
third business level strategy is focus. Focus is different from other business strategies
as it is segment based and has narrow competitive scope. This strategy involves
the selection of a market segment, or group of segments, in the industry and meeting
the needs of that preferred segment (or niche) better than the other market competitors
(Bolter & Mcmanus, 1999). This is also known as a niche strategy. In
focus strategy, the competitive advantage can be achieved by optimizing
strategy for the target segments.
Focus
strategy has two variants. They are:
1.
Cost
Focus; and
2.
Differentiation
Focus
Cost focus is where a firm seeks a cost advantage in the target segment; and Differentiation focus where a firm seeks differentiation in the target segment (Cherumilan, 2004). We shall discuss these variants later.
