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How would you characterize Stihl’s competitive strategy? Should it be classified as a low-cost provider, differentiation strategy, or a best-cost strategy? Also ,has the company chosen to focus on a narrow piece of the market or does it appear to pursue a broad market approach? Explain your answer
Expert Answer
The company has adopted the differentiation strategy and created high value proposition for the product on offer. The company has more than 1000 patents. It shows the core strengths of the product. Stihl focuses upon innovation, gets patents, develop products and offers value to the consumers. As a result, the company applies differentiation strategy. It helps the company to put a higher price over and above the competitor price.
Company gives focus upon the narrow piece of market using the network of 8000 independent dealers, spread across the globe. Here, price of the product is higher than the other competitors’ price, so the company focuses specific target segments that prefer value over the price. Thus, the narrow market approach is the best way to follow for the company.
