What competitive strategy involves creating distinctive features to differentiate from competitors?

The competitive strategy that involves creating distinctive features to differentiate a business from its competitors is differentiation. This strategy emphasizes unique attributes of a product or service, enabling it to stand out in the marketplace. By developing features that are perceived as valuable by customers, a company can attract and retain a loyal customer base, often allowing them to charge a premium price. This approach relies on a deep understanding of customer preferences and market trends to successfully distinguish a product from others in the industry.

Differentiation can involve improvements in quality, design, features, brand image, or customer service, all of which contribute to creating a unique identity for the company's offerings. This strategy is particularly effective in markets where consumers are willing to pay more for perceived quality or uniqueness, fostering brands that can thrive outside the confines of price competition.

In contrast, cost leadership focuses on becoming the lowest cost producer in the industry, which does not inherently involve creating distinctive features. Market penetration aims to increase market share with existing products, while product development is centered on creating new products for an existing market rather than distinguishing features of current offerings.