Low-cost vs. differentiation strategy

✌️ There are two types of well-established business strategies: low cost or differentiation.

What’s the difference?

💰 A low cost strategy is typically:

* Targeted towards sensitive price buyers
* Can be sustained by low-cost decisions

Meaning, if you can produce a similar quality product at a lower cost than your competitor, you’re winning.

For differentiation strategy, your company must completely understand your customers’ needs and pain points.

Your offering must be focused on providing your customer more than just a product. This is where brand intangibles come into play.

🦄 A differentiation strategy can exist when:

* You can continuously innovate based on your customers pain points and needs
* Your customers aren’t just buying based on price alone

So looking at your current business model…

Are you playing against cost?

Or against long-term brand loyalty?