Business models: the different forms of differentiation

In the market economy, it was traditionally accepted that a player could adopt one of two main generic strategies: cost domination, by offering the same product as its competitors at the best price (obtained thanks to a critical production size), or domination through perceptible differentiation, i.e. an advantage for which the customer is willing to pay a high price.

This binary model has evolved around a new differentiation model based on a triptych of "premium offer, low-cost offer, breakthrough offer" around a reference offer in a market segment.

To do this, company management will need to :

• identify the offer's value attributes ;

• identify the reference offer in a segment ;

• clearly situate the players and their choices in terms of value and costs;

• analyze the different categories of possible strategies;

• consolidate a coherent new business model.