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Focus (or market segmentation) strategy

Involves focusing on a small part of the overall market and succeeding through, either, cost leadership or differentiation within that small sector of the overall market. Focusing on a small sector of the overall market can enable a business to gain a better understanding of the needs of the market for a particular product or service, and thus, more efficient allocation of resources and more rapid response to changes. A focus differentiation strategy in particular can enable a business to meet the needs of customers more precisely than competitors, and thus, help secure customer loyalty, gain market leadership in a particular segment and maximise profits.

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