Advantages provides additional profitability with little initial investment provides method of circumventing tariffs, quotas, and other export barriers attractive roi low costs to implement disadvantages limited participation returns may be lost lack of control licensee may become competitor licensee may exploit company resources global. Participants are typically a group who are similar in some way, such as income, education, or career. Being able to work face to face with a range of people, of different demographics can give a more real insight into their opinions and help businesses to get to know their customers better. Process focused strategy pros cons advantages greater product. There could be a small businesses or involved in a single business or a large, complex and diversified conglomerate with several different businesses. Dec 30, 20 focus is the easiest and least costly of the three strategies for most companies. Describe the nature of focused cost leadership and focused differentiation. The impression is that fg is often adopted without any prior consideration of whether it. Forming sbus may not be right for everyone business.
Available under creative commonsnoncommercialsharealike 4. Each generic strategy offers advantages that firms can potentially leverage to enjoy strong performance, as well as disadvantages that may damage their performance. Oct 05, 2017 advantages and disadvantages of focus groups todays market researcher has an embarrassment of tools available to them, yet one research option has stood the test of time the focus group. As said the discussions are controlled by the moderator. There are three marketing ways you can sustain a competitive advantage with a focus strategy. With the use of his generic strategy model, a firm, understanding where its competitive advantage lies, can then formulate and implement an.
Diversification is a form of corporate strategy designed to improve opportunities for growth and profitability. In the case of focus differentiation, one advantage is that very high prices can be charged. A key market research tool, focus groups are often used in order to gain a better insight into different behaviours and opinions of consumers regarding products, brands and services. Each generic strategy offers advantages that firms can potentially leverage to enhance their success as well as disadvantages that may undermine their success. It is an inexpensive and fast method of acquiring valuable data. Following are the main advantages of focus group discussion in research.
Broad differentiation strategy is pursued by companies seeking to stand out as unique. Strategic management focus strategies tutorialspoint. In focus group discussion investigators interview people with common qualities or experience for eliciting ideas, thoughts and perceptions about particular subject areas or certain issues associated with an area of interest. We take a look at the advantages and disadvantages of focus groups below. Know the advantages and disadvantages of a cost leadership strategy. Figure 1 advantages and disadvantages of the focus group. Coworkers and friends are more comfortable in voicing views in each others company than on their own with the researcher. These three broad types of competitive strategies have also been labeled generic strategies. The benefits of a processfocused organization social media. It helps organisations carry out a comprehensive assessment of its environments and develop and implement strategies in line with them. Advantages, disadvantages and reasons for use article pdf available in ssrn electronic journal january 2009 with 4,093 reads how we measure reads.
Advantages of conducting a focus group interview are the flexibility in questioning, the encouragement of dialogue and exchange of ideas, the generation of hypotheses, being relatively fast and inexpensive and producing findings in a form that most users fully. Without a processfocused organization, employees are stomping out fires, missing out on opportunities, and generally wasting time and money because of poor planning and lack of vision. Techniques for analyzing industries and competitors, management expert michael porter outlined his generic strategies of business. Aug 27, 2010 the general unfixed nature of business demands new growth because of changing legislation, global competition, and market saturation. Firms that compete based on price and target a broad target market are following a cost leadership strategy. Focus groups have long been used in marketing, urban planning, and other social sciences. Firms often develop exemplary expertise about the goods and services that they offer in focused strategies.
Strategic management advantages and disadvantages wisestep. Advantages and disadvantages the research in management, especially in marketing, frequently considers focus group and other qualitative methods as exploratory tools, its results needing to be verified by a quantitative study, in a representative sample. Advantages and disadvantages of undifferentiated marketing. So, above are some of the advantages of the focus groups. Used since the 1960s, many teachers express concerns about the effectiveness of problembased learning pbl in certain classroom settings. If there are disadvantages to focus strategy, it might include limited growth potential, in terms of customer base and sales, due to the niche market youve decided to target. Advantages and disadvantages strategy advantages disadvantagesinternational transfer distinct competencies lack local responsiveness lack location economies cant exploit exp.
Advantages of strategic management management guru. Advantages and disadvantages of strategic planning howandwhat. One strategy map with some supporting documentation can include all the details needed for effective strategy execution. However, such a widespread use of fg seems to have become a fashionable research technique. Michael porter, believed that the basis for this advantage falls under 3 base strategies of cost leadership, differentiation and focus. How is competitive advantage used in focus strategy. Participants are typically a group who are similar in some. The general unfixed nature of business demands new growth because of changing legislation, global competition, and market saturation.
For example, a company like colgate that sells a widely used household product like toothpaste benefit from a. Strategic management essentially means the implementation and formulation of various strategies in order to achieve the goals of the company. Advantages and disadvantages of porter s generic strategy. These are often called bulletin board focus groups bbfgs, forums, or research communities, and they usually run over a few days. The focus group fg technique has been recently rediscovered by social scientists. Advantages and disadvantages of scenario approaches for. What are the advantages and disadvantages of focus group. It has become the subject of important methodological discussions and it is now considered a very innovative research method. A diversification strategy that enables a company to operate in a number of different markets reduces the risk of overall failure. Advantages and disadvantages of focus groups a focus group discussion is an interaction among one or more experts and more than one individual with the intention of gathering data. Jan 19, 2016 available under creative commonsnoncommercialsharealike 4. Focus groups typically involve a moderatorled group discussion with between eight and 10 people.
Benefits of focus strategy focus strategy is a form of marketing strategy where an organization concentrates all its resources mainly on expanding or entering a narrow industry segment or market. It explains to the stakeholders of different levels how their efforts contribute to the overall strategy. It is normally used where the organization knows a specific segment and it already has the products for competitively satisfying the set requirements. Process focused strategy pros cons advantages greater. The objective of a process strategy is to build a production process that meets customer requirements and product specification within cost and other managerial constraints. All three generic strategies are designed to achieve distinction relative to a rival. Explain what is meant by the term focus strategy 3. Differentiation focus is a bit more feasible, because it is a match between a niche provider with specific expertise and a narrow market with particular needs.
Focused cost leadership and focused differentiation. Companies that use a cost leadership strategy and those that use a differentiation strategy share one important characteristic. Focus groups typically involve a moderatorled group. Yin 2009 however, stresses that case studies have both advantages and disadvantages as a research method, and that it is important to understand and acknowledge that fact. To sumup, advantages and disadvantages of strategic planning are very clear as outlined above. In this lesson, youll learn more about the strategy and some businesses using it successfully. A focus strategy is one where a company decides to concentrate the resources of its marketing strategy on either expanding into a narrow market or segment or by entering it in the first place. Indeed, these firms often price their goods far above the general, following a differentiation strategy. Advantages and disadvantages of synchronous online focus groups.
Advantages and disadvantages of pdf format logaster. Using the sbu structure allows for diversification, products with a specific focus, and fewer distractions from within the competitive market. Understand how economies of scale help contribute to a cost leadership strategy. An organization can be confident that its strategy has resulted in one or more useful competitive advantages only after competitors efforts to duplicate its strategy have ceased of. Companies can diversify their business by offering new products to existing customers or entering new markets with existing products or new products. List of the advantages of a strategic business unit structure 1. Whereas low cost and differentiation are aimed at achieving their objectives industry wide, the focus or niche strategy is built on serving a particular target customer, product, or location very well.
Whether you introduce the studentcentred pedagogy as a onetime activity or mainstay exercise, grouping students together to solve openended problems can present pros and cons below are five advantages and disadvantages of problembased. We have already briefly mentioned this format in this article image file formats jpeg, png, svg, pdf. A firm has a competitive advantage when it implements a strategy competitors are unable to duplicate or find too costly to imitate. Created using powtoon free sign up at youtube create animated videos and animated presentations for free. A successful diversification strategy can help a company. Many businesses are unaware of the kinds of benefits using focus groups can have. May 29, 2017 to sumup, advantages and disadvantages of strategic planning are very clear as outlined above.
The departments and business units can have their own strategy scorecards aligned with overall strategy. The benefits of a processfocused organization social. Case study research, like all other research, complements the strengths and limitations of other types of research. In the case of the small firm, it could mean the adoption of. An organization can be confident that its strategy has resulted in one or more useful competitive advantages only after competitors efforts to duplicate its strategy have ceased of failed. Focus group is an important research method, here we list the advantages and disadvantages of such research method. Advantages and disadvantages of differentiation open. When you focus on a narrow target market, you have the best chance to become the leader of that niche. Focus group discussions are a common qualitative research strategy. If the focus groups provide advantages, it also provides some of the disadvantages. Online focus group advantages and disadvantages mrqual.
The toplevel strategy can be cascaded to the lower levels. What are the two basic strategy options for creating a competitive advantage. Advantages and disadvantages of the focused strategies. Advantages and disadvantages of the focused strategies open. Advantages and disadvantages of focus groups todays market researcher has an embarrassment of tools available to them, yet one research option has stood the test of time the focus group. What are the advantages and disadvantages of a focus strategy posted 3 years ago. Solved what are the advantages and disadvantages of a. In the case of differentiation, a key advantage is that effective differentiation creates an.
However, the management and resource requirements of operating in multiple markets may mean that companies do not focus on their most profitable sectors. A growing literature on the setting up and running of focus groups for social. Focus is the easiest and least costly of the three strategies for most companies. The use of focus groups in social science research focus groups originated in sociology merton and kendall 1946 were primarily used by market researchers in recent years templeton 1987 and are increasingly being used as a research tool in the social sciences. Jan 19, 2016 each generic strategy offers advantages that firms can potentially leverage to enhance their success as well as disadvantages that may undermine their success. Advantages and disadvantages of scenario approaches 221 speak for itself in terms of its purpose. These seem appealing because they are the closest online equivalent to facetoface focus groups. For example, a company like colgate that sells a widely used household product like toothpaste benefit from a successful undifferentiated targeting strategy. Know the advantages and disadvantages of focus strategies.
The moderators control the discussion as per his or her experience. This is the detailed initiative which is taken by the top management these strategic decisions are taken on the basis of available resources they also take into consideration the effects of the. Mar 26, 2017 created using powtoon free sign up at youtube create animated videos and animated presentations for free. We look now at the advantages and disadvantages of each.
The corporate strategy in these cases is about the basic direction of the firm as a whole. Here is a look at the advantages and disadvantages that come with this type of structure. Focus groups allow businesses to directly engage with their customers. Many small companies use this strategy to gain advantages over large chain competitors. Advantages focus group brings interaction between participants highlights their view of the world. Advantages and disadvantages of focus groups in research. However, putting criticisms aside, strategic planning plays an important role in organisations. Scenarios, as a prime technique for future studies, have long been used by government planners, corporate managers and military analysts as powerful tools to aid in decision making in the face of uncertainty. In addition, undifferentiated marketing campaigns come with lower costs for advertising and marketing due to their broad focus, thus saving even more money. These are the basic options your company has in entering and successfully competing in a given industry. In a focus group discussion, the interviewer talks to a group of people about their thoughts, opinions, beliefs, and attitudes towards a topic. In the case of focus differentiation, very high prices can be charged.
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