Since the adoption of a concentration strategy means that an enterprise implements a cost leadership strategy or a differentiation strategy in a specific target market, the advantages of the cost leadership strategy and the differentiation strategy in resisting the five competitive forces of the industry can also be found in the concentration strategy. Reflected

Because the concentration strategy avoids direct competition with competitors on a large scale

(1) There are differences in needs among buyer groups. (2) The target market is relatively attractive in terms of market capacity, growth rate, profitability, competition intensity, etc. (3) No other competitor in the target market adopts a similar strategy. (4) Enterprises have limited resources and capabilities, making it difficult to achieve cost leadership or differentiation in the entire industry. They can only select individual companies. Market segments.

(1) Narrow target market leads to high costs.

(2) The demand difference between buyer groups becomes smaller.

(3) Entry and competition of competitors.

Path 1 can be viewed as a focused cost leadership strategy. Path 2 is for enterprises to seek cost control A typical approach commonly used in the first strategy is to reduce the price while trying to maintain the quality of the product or service.

Path 4 is also a strategy widely used by companies, that is, providing customers with higher customer recognition value than competitors at the same or slightly higher price than competitors. Path 5 is to provide customers with higher recognition value at a particularly high price.

Hybrid strategy refers to approach 3. In some cases, companies can provide customers with higher recognition value while also Gain cost advantage.

Three factors will cause a company to obtain two advantages at the same time:

Path 6 raises prices without providing customers with a higher perceived value. Path 7 is a more dangerous extension than Path 6. It reduces the customer-recognized value of the product or service while increasing the corresponding price. Path 8 is to keep the price unchanged while reducing the customer-recognized value.