Question

There are many differentiation strategies that a company can use to attract customers and help it stand out among a group of competitors. Pick one of these strategies and explain the various steps that a procurement department might take to help the company better differentiate itself.

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Answer 1

In the 21^st century, every company is striving hard to beat competition and developing its competitive hold in the market. In such a scenario, differentiation strategy can be of great help for companies to develop a USP for itself and stand out among a group of customers. One of the most common differentiation strategy is product differentiation. The company offers an array of products under its brand umbrella having slight difference in functionality and features. Some companies also resort to targeted product differentiation in which they develop and offer products to cater to specific needs of targeted sub-group of customers. The companies patent their product ideologies and hence the uniqueness of the product gets maintained.

The steps which will help a company to better differentiate itself are as follows:

• Identify the targeted customers of the company
• Survey the market and identify the needs and requirements of the customers
• Develop products which will fulfil the needs of the customers
• Plan production to satisfy the demand of the customers