Question

1.what are the 5 bases of differentiation, explain.

2.impact of Differentiation on each of Porter’s 5 forces. example.

3.define the sources of cost advantages. example

4. define the impact of Cost Advantage on each of Porter’s 5 forces. example for each one.

Answer 1

The five bases of Differentiation are :

1. Product Differentiation – Product differentiation is a strategy of making organization products differentiate from others in the competitive market. It can be anything that makes it different from others as its design, durability, specification, style. Merchandise must be different in any way from other competitors and the firm's own products.
2. Service Differentiation – Service differentiation differs from organization to organization. In the case of service differentiation, services that are given to customers must differ from others and must be better than others to get succeed. For example, a courier company must provide fast service, convenient or careful delivery than others.
3. Channel Differentiation – Channel Differentiation differs from channel coverage of the organization. An organization must have an excellent channel coverage that makes organization reach in the remote area. A channel of providing the product and services must be safe, fast, better than others, and at a lower cost that makes the cost of the product lower.
4. People Differentiation – People Differentiation is a differentiation in the employees of the organization from others. An organization must hire the best employees and train them to get the best use of their work. Employees must be friendly, helpful to others. An organization should hire better employees than a competitive organization.
5. Image Differentiation - Image of an organization in the market is an essential differentiation from others that affects more than anything. Image of an organization is what customers think about the organization and all of the things organization does. It takes a very long time to attain a good image in the consumer's mind. Image is also called the brand value of the organization.