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Product differentiation plays a crucial role in reducing the power of buyers and protecting against substitutes. It creates brand loyalty, which shields against competitive rivalry and establishes high entry barriers. This reduces the buyer's power as they have fewer comparable alternatives. Additionally, it protects against substitutes as the differentiated product is perceived as unique, making it difficult for substitutes to gain a foothold. However, maintaining this differentiation may involve high costs such as extensive research, product design, and high-quality materials.
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Product differentiation creates brand loyalty that protects against competitive rivalry and creates high entry barriers. It reduces the power of buyers and protects against substitutes, as there are no apparent alternatives. Finally, it gives high margins that help cope with the power of suppliers. Differentiation may require preserving a perception of exclusivity that may prevent gaining a high market share. Further creating differentiation may involve high costs like extensive research, product design, and high-quality materials.
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How do you out-perform competitors and acquire a better understanding of key profitability drivers in your industry? This book, by the legendary Micha...
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