What is the key focus of product differentiation as a competitive strategy?

The key focus of product differentiation as a competitive strategy lies in offering unique products. This approach allows companies to create products that stand out from those of competitors, providing distinct attributes, features, or quality that appeal to a specific customer segment. By emphasizing uniqueness, businesses can establish a strong brand identity and may even justify higher prices, as consumers often perceive differentiated products as having greater value.

While lowering prices can attract customers, this strategy does not align with the essence of product differentiation, which is about creating a unique value proposition rather than competing solely on cost. Improving customer service is important, but it typically complements rather than defines product differentiation. Similarly, expanding market share can be a goal of various strategies, but it is not the primary focus of differentiation. The essence of product differentiation is fundamentally about uniqueness that resonates with consumer preferences, thereby enabling businesses to carve out a competitive advantage in the marketplace.