For example, Lid (supermarket industry) or Rainy (air travel industry). The differentiation strategy involves uniqueness of a product or service that is sufficiently values by the customers to allow a price premium. For instance, Jumbo (supermarket industry) or KILL (air travel industry). The third strategy a company may adapt is the focus strategy which targets a specific segment or niche of a certain domain of activity excluding there, for instance a shop selling Chinese food in Holland (supermarket industry) or a private jet company (air travel industry).
Bowman’s strategic clock Another way of approaching the three generic strategies is with the strategy clock. This framework is based on prices instead of costs as it’s easier to compare competitors on prices than costs. It allows organizations to travel around the cost changing strategy or combining them opposed to Porter’s sharp contrast between the differentiation and cost leadership strategy. This framework or clock involves four different zones. The differentiation zone which goes from approximately 12 o’clock to 2 o’clock.
Close to 12 o’clock the strategy moves towards differentiation without a price premium often used by firms to gain market share. Once the company has gained sufficient market share it can move towards 2 o’clock focusing on a differentiation strategy with a price premium. Secondly, the low price zone which involves low prices with reasonable service benefits as we move towards 9 o’clock and owe prices with low service benefits as we move towards the no frill strategy close to 6 o’clock.
Think for instance of Rainy which currently is asking Itself if it should let the passengers pay for the on-board toilet. The Hybrid zone from 9 o’clock to 12 o’clock combines both a low cost strategy and a differentiation strategy. As an example we can take Kea. Finally, the non- competitive zone going from 2 o’clock to 6 o’clock which includes strategies leading to failure. It’s not possible to combine high prices with low service benefits.