Another word that is often mentioned in innovative thinking is differentiation. In order to survive or even fight our way out in the Red Sea market, we must have a competitive strategy of differentiation strategy. However, how to implement differentiation strategy has become the primary problem facing enterprises at present. The low-price strategy is cost-centered, and the purpose of differentiation strategy is to provide product attributes that competitors do not have, and to obtain additional sales income without increasing other inputs.
Haidilao has great achievements in the catering hot pot market. With its unique service business model, Haidilao has sprung up all over the world and made great strides. Pinduoduo's future is not the next Taobao Tmall. Cheap and affordable is everyone's favorite, and it is the universal law of retail industry. The hard part is how to make it cheap and affordable. How to adopt low prices without vehicle differentiation is unsustainable. It's innovation that more products can be cheap and good.
On the surface, Taobao and Pinduoduo are both e-commerce platforms, but their business logic is quite different. Taobao has a wealth of commodity choices and brand merchants, which makes Alibaba have obvious advantages in search scenarios. Pinduoduo's business logic is "small profits but quick turnover". Pinduoduo said that a large amount of foreign exchange integrates limited commodities and creates explosions, so that businesses can realize small profits but quick turnover. This model is especially suitable for sinking markets and high-frequency products.
Pinduoduo adheres to the differentiation strategy: user demand comes first, and does not pursue the comprehensive coverage of commodity SKUs, but concentrates traffic on a few SKUs to form small profits but quick turnover; Do not deliberately emphasize the rising trend of the brand, but insist on upgrading the cost-effective products to customers.
The following are the conditions for enterprises to implement differentiation strategy:
Philip kotler pointed out that whether a difference is worth establishing depends on whether it can satisfy the following points: importance, exclusiveness, superiority, perception, preemption, affordability and profitability.
1. External conditions for implementing differentiation strategy
(1) There are many ways to create the difference between the products of enterprises and competitors, and this difference is considered valuable by customers.
(2) Customers' demands for products and requirements for use are varied, that is, customers' demands are different.
(3) There are few competitors who adopt similar differentiation practices, that is, those who can truly guarantee the "differentiation" of enterprises.
(4) With the rapid development of technology, the market competition mainly focuses on the continuous introduction of new product functions.
2. Internal conditions for enterprises to implement differentiation strategy
(1) Strong research and development ability, and researchers should have creative vision;
(2) The enterprise has a reputation of leading in product quality or technology;
(3) the enterprise has a long history in this industry or can absorb the skills of other enterprises and become a whole;
(4) Strong marketing ability;
(5) There should be strong coordination between R&D, product development, marketing and other functional departments;
(6) Enterprises should provide material guarantee for attracting senior researchers, innovative talents and highly skilled employees;
(7) Establish a strong cooperative relationship with various sales channels.
Differentiation method:
1. According to SWOT analysis, make use of the competitive advantages of enterprises to deal with market opportunities.
2. Distinguish from supply chain partners. For example, the group marketing of "floor+tile+bathroom" of different brands in home improvement.
In the process of determining the differentiation scheme, we should not only combine the results of effectiveness ranking, but also consider the actual situation of enterprise resources and capabilities, which is directly related to the effective implementation of differentiation. Only when we have superior resources and fully consider the resources owned by enterprises and the cost of differentiation, the differentiation strategy will not be easily imitated by competitors.
There are no declining industries, only declining enterprises. Similarly, there are no declining industries, only declining thinking and business models. With or without you, the market is here.