How Should We Apply Differentiation Strategy?

Since Harvard Business School lifelong professor Michael Porter proposed "Think Different" - the slogan of differential competition, many enterprises are also advocating this point.

How should we apply the strategy of differentiation?

From the success of Apple Corp's implementation of differentiation strategy and the failure of IT retail businesses to adopt the strategy of "flat channel" differentiation, we can see the splendor and gravity of the word "differentiation".

Thinking differently, apple is coming back to life.

How to make the differentiation strategy best implemented? Without him, only by multiplying creativity, we must create creative space.

"In the" differentiation "strategy, the most classic case of successful implementation of differentiation strategy is Apple Corp.

Mr. Chen, a former international brand research firm, has had many years of tracking research on Apple Corp. He believes that differentiation strategy is an important reason why Apple Corp can bring back to life.

In 1990s, Apple was unable to resist the attraction of the earth's core as a result of a series of misjudgments and internal organizational problems.

At the beginning of 1997, apple computer's PC share was only 3%, and the idol brand that had been worshipped became a struggle for survival. It was a great pity for us. The cover of "business week" announced directly that "the fall of an American symbol."

But this "American symbol" once again came back after Steven Jobs returned to apple.

In 1997, legendary Jobs took charge of the dangerous apple and implemented a drastic reform.

In order to completely change the bad image of Apple Corp, Jobs decided to increase the advertising input of the company.

In 1998, the company's advertising budget increased to $100 million.

The concept of "Think Different" was formally put forward at this time.

The advent of the "Think Different" series of advertisements shows Jobs's Thoughts on the strategy of Apple Corp differentiation.

The scheme was conceived by the advertiser crouch, putting the slogan of "Think Different" or "plating all kinds of thoughts" into combination with many "creative talents" in different fields, including black and white photographs of Einstein, Gandhi, boxing champion Ali, Richard Branson, John Lennon and Ono Yoko.

The plan's flat ads can be seen everywhere in a variety of big advertising billboards, wall ads, and bus bodies.

When this advertisement stimulates the consumer to think about the difference between the apple computer and the public, it also encourages people to think about their own differences and to make them creative genius by using the apple computer.

Jobs said: "different thinking represents the spirit of Apple brand, because people with enthusiasm and creativity can make the world a better place.

Apple decided to create the best tools in the world for the creative people everywhere.

In 1998, the secret weapon of Jobs's differentiation strategy was not formally launched before iMac received 150 thousand orders.

Since then, a variety of new colors and enhancements of iMac have been launched, so that users who were completely disappointed with the "apple" have come back, and apple has once again become the focus of the IT world.

The computer went on sale for only 6 weeks and sold 278 thousand units, so that BusinessWeek ranked iMac as the best product in 1998.

The charm of iMac gives all the computer fans a bright look: its shell is plucent plastic, with five colors of blue, green, orange, red and purple. The fuselage is of arc shape and looks plump and adorable.

Appearance is the first step of Jobs's humanization of iMac. In order to make the appearance more unique, the designer specially consulted the packaging experts of the candy company, which caused a plastic fever in the design field at that time.

Apple computer has always been an anomaly in the killing field of personal computers. Although its market share is small, it is the only brand that can grow in recent years except DELL and SONY.

Every generation of new products is launched by PC manufacturers. Apple actually relies on "design innovation", retaining the pure character of engineers in this industry, and the voice position of people.

In an interview with Time magazine, Jobs mentioned in particular: "designing a unique computer is very simple and difficult. It is how to make users feel close and easy to use."

This is the PC factory that has been followed up for a long time.

Personalized company

In fact, Apple's first choice as a leading computer maker was the independence of the Macintosh operating system and advanced industrial design philosophy in the late 1990s.

Jobs knows that only innovation can make apple energetic, so we focus on Technological Development of new products. In less than 3 years, following the "iMac" desktop computers, "iBook" notebook computers and "PowerG4" desktop computers have come out in an attempt to recapture the market occupied by PC.

IMac network computer is just the beginning of Jobs's strategic change, that is, instead of using apple computer as a pure PC manufacturer, it aims at personalized pursuit.

Since then, Jobs has begun to move beyond the computer field and move towards the two major markets of music and film.

In 1999, Apple launched iMovie, which used the video editing program on the Mac machine to bring the professional digital editing platform to the public. In January 2001, Apple launched the video editing software iTunes; ten months later, it launched its first iPod; in 2002, Apple also launched the Windows version iPod.

There is no doubt that Apple's strategy is changing, and this kind of strategic flexibility which is biased towards "personalization" has made Jobs taste the sweetness.

As an outstanding leader of practical combat, Jobs gradually strengthened his strategic pformation to Apple Corp: no longer portrayed apple as a pure PC manufacturer, but he was turning it into a high-end consumer electronics and service company.

Since the launch of iMac in 1998, every time Apple has released new products like a high number of gunpowder, which has blown everyone up and down, Jobs seems to be enjoying it.

{page_break}

Flat channel IT retail lost Beijing

A group of IT retail emerging power, marked by chain stores, began attacking traditional electronic stores in Zhongguancun and East China as early as 2003. The slogan of setting up a flat trend in the IT field has been repeatedly shouted by many new models.

But this new model that emphasizes differentiation is not achieving the desired results.

Today, the fate of the leaders is extremely unbearable.

"Beijing cyberspace" has failed completely, and the foreign business shops have been repeatedly worried. "Chinese digital" has been left behind, but it has no choice but to turn back to logistics. "Hongli multi" attempt is a flash in the pan, not even many people remember this name; and "Eupa 3C shop" has also experienced a disastrous defeat.

Even a lot of traditional stores operators have invariably stated on various occasions: "the new flat mode of direct operation will not be effective in the short term."

However, when the market competition is more and more intense, the customer demand is increasingly diversified, and the external environment is becoming more and more complex. The manufacturers who are in the supply chain of IT have finally begun to try to find their new role positioning and core value in the process of exploration.

"Flattening" has become the core word of differential competition.

"The 3C business environment in Taiwan and Mainland China is very different. Eupa used to copy the business model in Taiwan, for example, goods are displayed by type rather than brand, and no shopping guides are created, which results in a drop in the shopping habits of mainland consumers."

On the other hand, mainland consumers are generally sensitive to prices, while Eupa pays attention to the long-term customer training of members, "said a Shanghai appliance store owner who did not want to be named."

Despite the emphasis on membership, the discount rate is generally not large, and there are less than 10% of the discount. Compared to Gome, Suning and the stimulating form of frequent discounts and big prizes at local department stores, it is obviously difficult for consumers to form attraction.

"Regional differences are important.

In Taiwan, due to geographical restrictions, manufacturers generally do not need to go through the intermediate links to reach the sales terminals. It is a typical case that Eupa, which starts with home appliances, and Eupa 3C access.

In such an upstream channel, when Eupa enters the mainland market, it ignores the profit point as a middleman, which is also a great loss.

Li Lei, an analyst at Sai Di consulting, said.

The difference of channel flattening is very advanced. The traditional appliance stores have achieved good results. Even if they are involved in digital products, home appliance stores also have a good performance.

On the three day of new year's day, IT emerging stores, featuring chain stores, have made a fortune.

Gome, based in Zhongguancun, significantly reduced procurement and operating costs by flat channels. Sales of communications digital products increased by 158% over the same period last year, up from 20% last year to 28%.

Suning bought a lot of digital products such as SONY, Canon, OLYMPUS, Samsung and other famous brands. The abundant supply ensured that the sales performance increased rapidly during the new year's day, an increase of more than 200% over the same period.

Why can household appliance stores achieve good results, while the IT retailers in the true sense of the same way are struggling?

"Careful observation of the difference between home appliance stores and IT retail enterprises will find that there are still great differences in product types", Li Lei said. "Home appliances stores mainly sell digital products, while IT retailers mainly sell electronic components and IT devices, although there are many digital products."

{page_break}

Although the differentiation of this channel is very advanced, it is difficult to continue in the short term because it is not suitable for consumers' buying habits.

But in the field of IT, because the long term consumption environment is different from other categories, even good differentiation theory is not enough to support enterprise profitability.

These places in Zhongguancun are mainly electronic components and IT equipment.

Because professionals buy, or young people buy, they value their relationship and products professionally. They know how to go to Amoy, know familiar stores, and understand long-term cooperation.

The strength of modern channels is to treat customers as idiots, shopping guides, comfortable environment and product diversity. This strength has lost its role in Zhongguancun's IT products.

Li Zhongjin, the marketing director who announced sales of 5 billion yuan last year, made the best summary of Li Lei's analysis: "the inherent consumption habits and concepts of consumers who come to Zhongguancun to buy IT digital goods are hard to be quickly broken. Therefore, no matter how hard the emerging powers are, Zhongguancun's position as an important distribution center for IT products in northern China is not to be shaken in the short term."