Low-cost strategy

One popular method of differentiation that has been adopted by corporations across a whole range of industries is the "low-cost" model. This model has been amply evidenced in many industry sectors.

The unique element of the "low cost" model is that the whole of the business structure and supply chain is geared towards achieving a low cost base.

Quality and Product

However, differentiation does not have to be cost led. It can also be focused upon quality and choice, with cost and price being a secondary factor. Take for example the fashion industry. In the UK over recent years, this industry has been attacked by the "low-cost" organisation in the form of supermarkets and fashion discount stores. Although low-price competitors have secured a reasonable market share, many of the high quality fashion stores are still thriving. The reason for this is that they have concentrated their efforts on quality and the uniqueness of choice, which appeals to those consumers who do not like the "mass market" approach.

Innovative products

Another differentiation over competitors can be achieved by simply change to or creation of a new product. For example Apple, an organisation that experienced fierce competition within the computer sales market, developed the Ipod. The difference of this product from others within their range gave the corporation a completely new marketplace, which enabled them to create a significant competitive advantage. Other electronic giants, particularly those from Japan, have successfully adopted similar tactics.

Other businesses attempt to differentiate themselves from the competition simply by relying upon the brand image to produce this result. Examples of this in a practical environment can be found with such corporations as Nike, which uses an instantly recognizable tick as its brand symbol, an image that is effective in promotion. However, for a brand to remain distinguishable in the long term it has to represent a level of difference from its competitors in terms of the quality of the product or service being promoted.