Strategic focus is the ability of a firm to concentrate resources on a particular activity or set of activities. This strategy is a necessary element of business success, but it does not necessarily come naturally to all firms.
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A firm that has developed a focus strategy will have tremendous expertise about the products or services it offers and will be able to stay closely connected with its customers. This type of expertise allows the company to create and market products that satisfy their customers’ specific needs better than other competitors can.
Disadvantages of Strategic Focus
A disadvantage of a focus strategy is that it often increases manufacturing inefficiencies because the firm’s product and service offerings are more specialized. This means that the firm must use equipment and personnel that have a lower utilization rate. This can lead to production delays or higher costs.
Another disadvantage is that focus strategies are difficult to maintain, especially when new players ‘outfocus’ the firm and when consumer tastes or technology change. This can cause a shift from broad targeting to narrow targeting, which can also lead to reduced production volumes and unit costs.
To develop a successful strategy, companies must identify their desired end state and determine how various impacts will affect the achievement of that end state. They must then devise general plans for leveraging their strengths and opportunities, or overcoming their weaknesses and threats.