This strategic change is vital, because it helps to retain or gain competitive advantage in an altered business environment. Vertical differentiation refers to products that fall on a scale from best to worst, highest to lowest, impacting the overall functionality of the item. Product differentiation means that your product has one or more distinct attributes that separate it from competitors. Indeed, these firms often price their wares far above what is charged by firms following a differentiation strategy (Figure 5.10 Figure 5.10 Executing a Focus Strategy ). Differentiation Strategy Prof. (Dr.) Nitin Zaware Prof. (Dr.) Nitin Zaware 1 2. Companies pursue various marketing strategies to attract customers to them rather than to competitors. In the case of focus differentiation, one advantage is that very high prices can be charged. The goal is to produce goods or services at the lowest possible cost by organizing every potential resource around the current production methods. Differentiation can be thought of as serving two broad goals. strategy. Advantages and Disadvantages of Product Differentiation. • 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. Differentiation Strategy on the Performance of Firms Abstract This study empirically investigates the effects of business strategies on the relationship between financial leverage and the performance of firms. Differentiation strategies have strengths and weaknesses. Strategic change needs planning as a lot of issues arise and need to be solved. 1.1.5 Process differentiation Like content differentiation, process can also be differentiated in response to readiness, interest and learning profile (Tomlinson 2005a, 2005b). Examples of the successful use of a differentiation strategy are Hero Honda, Asian Paints, HLL, Nike athletic shoes, Apple Computer, and Mercedes-Benz automobiles. • Note, however, that a focus strategy means achieving either a low cost advantage or differentiation in a narrow part of the market. Moreover, successful differentiation strategy of a firm may attract competitors to enter the company's market segment and copy the differentiated product (Lynch, 2003). A differentiation strategy allows companies to communicate the unique features of their products and create a niche for the product. The corporate strategy in these cases is about the basic direction of the firm as a whole. Product differentiation occurs on two clear levels: vertical and horizontal. Then, by achieving the lowest possible cost, the leader can place their team or organization into a position where the lowest price in the market is charged for needed goods or services. 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