Blended strategy combines differentiation, cost, and focus strategies to improve a company’s overall performance and competitive advantage. Differentiation involves making a product or service unique, cost leadership involves reducing operating expenses to offer low prices, and focus involves concentrating on a specific market niche. A combination of these strategies can be used simultaneously.
A blended strategy is a resource used by corporations or businesses to further their identified business objectives at the same time. Typically, companies pursue objectives such as growth, consolidation, or other interests that include stability, with the goal of improving their overall performance. Some strategies that can be combined include differentiation, cost, and the system by which a company focuses on an identified market niche. All these strategies are aimed at increasing or improving the competitive advantage of a business.
One of the components of the combined advantage is the differentiation strategy. This strategy involves a specific effort by a company to make its product or service perceived as unique and innovative in a market full of similar products or services. Companies use various methods to impart this feeling or perception of uniqueness to their own product brand, which already exists in different forms. Such methods include unique packaging, mystery ingredients, or clever promotions. The uniqueness of the product or service is the differentiating factor.
Another component of a blended strategy is the cost leadership strategy whereby a company deliberately sets out to use all the resources at its disposal to make its products the most profitable. Such resources may include utilizing cheaper labor by outsourcing or locating production plants in cheap labor countries, as well as managing distribution costs by identifying effective distribution channels. The reduction in operating expenses pays off in terms of reduced costs to consumers. This type of strategy can help the company make competitive profits, while attracting customers due to its low price.
The third component that can be included in a blended strategy is the focus strategy in which the company selects a niche for concentration. Such a niche could be based on geographic considerations or by identifying a particular segment in the market. For example, a company that makes women’s clothing may choose to focus on the production of products intended exclusively for adolescents. The main reason for this segmentation is the belief that a company will perform more efficiently if it concentrates all its resources on a single market segment.
Combination strategy is the combination of any of these strategies at the same time. As such, a company might decide to use a differentiation and focus strategy at the same time instead of concentrating on just one. The mix could also be between cost leadership and focus, or any other mix the business deems appropriate.
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