Complications of a concentrated low-cost

Question

What are the complications of a concentrated low-cost or concentrated differentiation strategy?

Answer 1

Focusing carries many complications of a concentrated low-cost or concentrated differentiation strategy such as:

a. The possibility that competitors will discover efficient methods to match the focused firm’s capabilities in serving the goal niche.

b. The latent for the preferences and requirements of niche members to move over time toward the product attributes preferred by the majority of purchasers.

c. The section may become so attractive it is soon busy with competitors, splintering segment benefits and intensifying rivalry.