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What makes the strategic niche attractive?

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Strategic niche: focus and specialization
 
Niche strategy focuses on the concentration of business in a very narrow segment of the broader market; a niche where potential buyers have some distinct preferences or needs. Some examples are Apple in computers, in Woolite detergent ( only for wool).


What makes the strategic niche attractive?
  • if not easy or economically feasible for  wide-market competitors to meet the needs of niche buyers
  • when nobody else specializes in that niche
  • the niche is large enough to be profitable and with good growth prospects
  • The company has the skills and  resources to serve the niche effectively
The main advantage of companies with strategic niche specialization is the speed with which can react in competitive pressures. But there are risks too.


The risks of niche strategy are:
  • the likelihood that someone will find ways to emulate
  • the probability that buyer preferences  may change to a mainstream product
The company  choosing to follow a niche strategy is at a comparative advantage when the niche market is fast growing, is large enough and profitable, but small enough not to attract large players. 

Summing Up: Deep  specialization , continuous redefinition of their niche market, constant contact with the customer and     continuous development and improvement of service  makes them practically invulnerable to competitors, allowing them to minimize risks and maximize the effectiveness of the strategy.

An example of niche strategy that's hard to be emulated is  Enterprise-Rent-A-Car >>



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