What are the advantages or disadvantages of the focus strategy?
Is Frida Baby limiting its opportunities by focusing on one market segment? Should they look to expand to develop products for older children?
What are the advantages of competing in a fragmented industry? What are the disadvantages?
The advantage of the focus strategy is stated below-
Helps to build a strong relationship in the targeted market– One of the advantages of a focus strategy is that it helps to build a good relationship with the customer in the target market.
Competition is limited– As the company has brand loyalty from the customer which will help the brand to limit the competition.
The disadvantage of the focus strategy is stated below-
High cost– The main disadvantage is that the cost is high due to internal and external factors and due to the less utilization of the resources in the market.
Limited growth– The focus strategy aims at the niche demographic so there is no scope for product expansion and growth.
According to my opinion, I agree with the fact that Frida Baby is limiting its opportunities by focusing on one market segment. It has been seen that the Frida company is focusing on the specific market for their product which led to slow growth in the company (Deshpande, 2021, p.5). The company is only focusing on the product of small children and the firm also believe that it can produce products that meet parents’ needs better than larger personal care product. The company needs to focus on the product for the older children. If the company will focus on another product apart from the baby product, then it will open the opportunity for the company, and as well as growth can take place and will able to attract more customers in the market.
The advantages of competing in a fragmented industry are stated below-
No barrier to entry– The main advantage of competing in a fragmented industry is that small companies can easily enter the market.
Opportunity to innovate and differentiate– Small businesses operate in the industry which help them to make innovation in their product and differentiate their product from each other.
The disadvantages of competing in a fragmented industry are stated below-
Lack of economy of scale– As in the fragmented market the small business usually deals with home decor and does not have the availability to handle or deliver the product (Deshpande, 2021, p.5).
Repetitive offering– As it is for the small market there are repetitive offerings and the product and the service are of the same type.
Deshpande, A. P. (2021). Developing competitive position in fragmented markets through generic strategies. Psychology and Education Journal, 58(4), 3106-3109.