5.3    Differentiation and case study

Key Takeaways

Differentiation is the strategic tactic of separating your produce or service from others in the industry. Unlike cost leaders, differentiation strategy focuses on the value proposition to customers. That is, the product or service has some unique character or feature that differentiates it from other competitors where the value proposition is greater to certain customers. 

Examples of differentiation sub-strategies include:

• Product performance (Speed, strength, etc.)

• Quality of how the product is made.

• Durability of product

• Appearance

• Functionality (e.g., ease of use, features, etc.)

• Brand Image (e.g., luxury goods Rolex)

• Novelty of Innovation

• Operational Efficiency

• Support for Customer (Warranty, Guarantee, Customer Service)

Case study: Boeing vs. Airbus

The competition between Airbus and Boeing has been characterised as a duopoly in the large jet airliner market since the 1990s. This resulted from a series of mergers within the global aerospace industry, with Airbus beginning as a pan-European consortium while the American Boeing absorbed its former arch-rival, McDonnell Douglas, in 1997. 

Product differentiation is a strategy being employed by the two companies to create a competitive advantage. Boeing and airbus have differentiated their products by increasing the seating capacity of its aircrafts, increasing the engine capacity, manufacturing a wide range of products. The companies have created new products when the market shifts its demand patterns.

视频：Airbus-Boeing Case study and differentiation 【授课教师录制】

补充阅读：Game theory: the developer's dilemma, Boeing vs. Airbus

课件分享：Boeing and Airbus