Metaphors of strategy: Strategy as focus

Michael Porter has established that strategy is about differentiation and his position is widely accepted. Focus is also an important aspect of strategy and serves as yet another metaphor of strategy. To balance Porter’s view with the idea of strategy as focus, I will contribute the term “differentiating focus” – the focus of an organization that enables it to be different from all others. Prahalad and Hamel would refer to this as core competencies. Experts also define cost leadership and operational efficiency as ways to determine the strategic focus of organizations. This article covers five elements of strategy as focus.
Product focus

A product-focused strategy could be based on a mono-product business or a selection of related products or services. Product-focused strategies are deeply linked to the products being delivered to the market. Aircraft manufacturers such as Boeing and Airbus adopt product-focused strategies. The Airbus Group manufactures commercial and military aircraft, space launch vehicles, missiles, satellites and defense systems. Boeing similar produces commercial aircraft along with space and defense products. Companies like these will typically engage other specialist entities to deliver electronic and non-electronic components of aircraft. Such entities are also likely to be product-focused in their strategy.

Product-focused businesses apply peculiar standards in quality and pricing which might entail long-term contracts to manufacture, say, a specific number of aircraft. Repeat business becomes the norm with extensions of service and maintenance. One prime advantage of a product-focused strategy is that switching can be quite costly for customers. Still, product quality and innovation are required to retain customers.
Service delivery focus

This strategy focus can be applied to relatively commonplace products or services but service is used as a distinguishing factor. For example, coffee is a common beverage that is generally available for people to buy. However, coffee houses like Starbucks and Costa have created uncommon approaches to selling coffee. They generate premium pricing advantages through branding of outlets and packaging of optional flavours to suit different taste buds.

Indeed, coffee shops have popularized coffee more than the direct producers of the commodity. Loyal and not-so-loyal coffee drinkers step into coffee shops for a cup of latte or cappuccino. Although coffee is coffee, coffee shops have altered the sameness of coffee stretching it from a commodity into brands. With service-focused strategies, related industries also acquire benefits such as milk and sugar producers will get through coffee sellers. The more loyal coffee drinkers will buy coffee making equipment to get a semblance of what coffee shops offer. A service-focused strategy also generates long-term productive results if quality and standards are continually enhanced.
Distribution focus

Similar to the service-focus, distribution-focused organizations apply their strategies to readily available products or services. The advent of online markets has radically altered this strategic approach by making it easier to reach customers wherever they are located at any time of the day. Consequently, retail outlets such as Spar and Tesco which previously were based on human traffic now combine physical and online channels to sell their inventory. The web is flooded with online channelsfor books, food (including perishable and frozen), fashion, electronics and almost anything that can be packed in a carton. Amazon, Jumia, Konga and loads of other online shops are connecting with buyers from data-carrying mobile devices.

The choice for sellers is mostly between being an online retailer or combining online with physical outlets. Maintaining only physical outlets is becoming rare and extinguishing businesses who insist on such a distribution model. The physical element of online shopping is provided in the mode of delivery to customers at specified addresses. This strategy engages other participants in the value chain such as logistics and packaging companies. Low inventory holding costs imply that online retailers have the capacity to pass discounts to buyers – a definite advantage in the retail business.
Customer focus

A customer-focused strategy is delineated primarily by customer type. It responds to the question of which customer segment is to be served. Segments can be geographical, demographic, social or structural as is the case in deciding between business-to-business (B2B) or business to consumer (B2C). Within geographical locations, companies may decide they want to serve mainly customers in a region or nation. A demographic customer-focused strategy will focus on particular age or social groups such as children, teens, adults or even the aged. Sports equipment companies are focused on athletes and athletic types of people who may or may not be professional. Customer-focused strategies are valuable for building strong customer loyalty through increasing benefits for the groups being served.
Market focus

This refers to geographical markets and enables strategic focus on delivering products or services largely within specific locations. This is observable in the strategy of Standard Chartered Bank having bulk of its business in Asian and African markets. Ecobank boasts of being the West African bank doing business across English and French-speaking countries in the sub-region and creating international connections for customers. This strategy also builds customer affinity.
Closing note

Strategy as focus could entail emphasis on product, service delivery, distribution, customer type or market location.