Example of Differentiation
Grandma's Adventures in Liverpool, U.K, employs a differentiation strategy to give them a competitive advantage over other child play center firms. Grandma’s is a play center that includes a large play area that can accommodate 100 children, reception and party rooms, and cafeteria style food service area. There were several other competing play centers in Liverpool and Grandma’s wanted to differentiate themselves as a way to stand out from the other alternatives. One of their differentiation strategies was to develop a set of core principles known as 4H Ethos. 4H Ethos stands for healthy and safe environment, healthy play, healthy refreshments, and happy customers. The offerings at Grandma’s are premium priced, about twice that of other local competitors. To support 4H Ethos, Grandma’s conducts extensive employee training and superior maintenance of the physical facility.
This strategy has resulted in above average attendance at Grandma’s as compared to the competition. 1,500 to 2,000 children visit Grandma’s each week as compared to the industry average of 950. Customer surveys have indicated a high level of satisfaction with the staff and with the cleanliness of the facility. In addition, customers come primarily from a 20 mile radius around the facility. Good word of mouth has resulted from giving customers an excellent experience. Survey respondents have reported more than 50% of visits resulted from the recommendations of friends or relatives.
Grandma's example demonstrates the fact that strategic management principles can also be used by smaller, family owned firms to increase their profitability and stability. This is especially important in difficult economic conditions such as the recent recession and weak recovery. Since small firms have fewer resources to endure a sluggish economy they can greatly benefit from strategic analysis to strengthen their firms.
This strategy has resulted in above average attendance at Grandma’s as compared to the competition. 1,500 to 2,000 children visit Grandma’s each week as compared to the industry average of 950. Customer surveys have indicated a high level of satisfaction with the staff and with the cleanliness of the facility. In addition, customers come primarily from a 20 mile radius around the facility. Good word of mouth has resulted from giving customers an excellent experience. Survey respondents have reported more than 50% of visits resulted from the recommendations of friends or relatives.
Grandma's example demonstrates the fact that strategic management principles can also be used by smaller, family owned firms to increase their profitability and stability. This is especially important in difficult economic conditions such as the recent recession and weak recovery. Since small firms have fewer resources to endure a sluggish economy they can greatly benefit from strategic analysis to strengthen their firms.