What Are the Different Types of Niche Strategies?

The word "niche" is a transliteration of the English word "Niche", which means "niche", meaning to supplement or add stitches. Niche strategy is a compound strategy based on a specialized strategy. If it is aimed at Chinese companies, it can be understood as a corporate growth strategy. It refers to companies that select a specific product or service area, concentrate their efforts to enter and become a leader, from the local market to the country to the world, while establishing various barriers, and gradually forming a sustainable competitive advantage. It emphasizes concentration and late development in competitive strategies, and market segmentation in functional strategies.

Niche strategy

Niche refers to certain market segments that are usually ignored by large companies in the market; so-called niche strategies refer to the strategies adopted by small businesses to occupy these markets through specialized operations, thereby maximizing gains. The niche strategy and the target agglomeration strategy proposed by Porter are related but there are also differences. They are based on the segmentation of the target market, but in market selection, the niche strategy focuses on choice Areas where strong competitors are not very interesting, and target agglomeration strategies emphasize the continued occupation of selected areas.

Ideal niche market characteristics

Generally speaking, an ideal niche market has the following characteristics:

1.The market is of sufficient size and

The main significance of implementing a niche strategy is that companies occupying a lower share in the entire market can flexibly and cleverly pick up the niche and pinpoint it, thereby achieving high profits. Clifford and Now Woodner have studied more than two dozen highly successful midsize companies and their respective

Niche strategies are for the weak,

The main content of a niche strategy is to choose a suitable niche business, establish the goal of China and even the global market champion, and take effective strategic actions.

In the Chinese market, on the one hand, resources are limited. In the face of market globalization, Chinese companies are far worse than multinational companies in terms of human, material, financial, technical, production, sales, branding, management and other marketing resources. Most of them Enterprises have just entered the year of weak crowns, and they do not yet have enough resources and strong enough competitiveness; on the other hand, in the international market, the cruel competitive environment has forced companies to focus on resources in order to survive. Although Chinese companies are unable to compete with multinational companies Positive competition, but it can concentrate resources in multinational companies that have no time to take care of or some small and diverse consumer groups market, in order to respond to the offensive of competitors, and can even become a magic weapon for Chinese companies to dominate.

Niche strategy is a magic weapon for companies to change from small to large. Many small and medium-sized enterprises in China usually understand the niche just to find market gaps and opportunities to make money. The Chinese-style thinking of niche is actually to equate the niche strategy with the growth strategy of SMEs. Careful study of those large multinational companies has almost such a niche history behind them-market latecomers have used the niche strategy to create new advantages, and eventually occupied a strong market position and changed the historical pattern. When Dell first entered the personal computer business, International Business Machines and Compaq were dominating the personal computer market. At that time, all products must be compatible with IBM computers. Twenty years later, IBM had terminated its personal computer production. Compaq also Had to merge with HP to survive. But Dell has ruled the personal computer market with a unique direct sales model

Niche market

field. There are countless similar cases. Therefore, as the market environment becomes more mature and stable, it is entirely possible for China's SMEs to use niche strategies to defeat large domestic enterprises and even multinational enterprises and take over the world instead.

Large companies need to choose a niche if they want to capture new business opportunities, get richer profits, and meet the needs of successful expansion. Some large multinational corporations have made successful demonstrations for us in this regard. In 2004, Procter & Gamble launched the first series of daily necessities aimed at 9 to 16-year-old boys. This was a blank market that had not been noticed before. McDonald's and its franchisees in the U.S. have opened 12 McDonald's gourmet restaurants that target "the young white-collar workers who usually favor fast food and have higher incomes." White collar. Chinese large enterprises can also make full use of their comparative advantages to find or create niche markets, use persistent niche attitudes and constantly innovate niche methods, and use composite niche strategies to achieve long-term foundation.

To implement a niche growth strategy, regardless of the size of an enterprise, it needs to go through a process: finding a niche, entering a niche market, occupying and maintaining the market, and the sustainable development of the enterprise.

Finding a niche Niche strategy is not planned by the marketing and advertising departments, nor is it limited to just grabbing products and services. It is possible to create niche points, create unique products and create differentiation at any point in the value chain.

For Chinese companies, in the initial stage, a better entry point is to choose industries that have comparative advantages in China, and industries that can combine their potential advantages with this comparative advantage. Examining from the perspective of marketing, you will find that successful niche players in the market will have three main directions when seizing opportunities: one is to provide goods and services to an exclusive customer base; the other is to persevere Local manufacturing or selling is unique, creating unique value of products; the other is to successfully choose a different realization path in the market breakout.

Entering the niche market To propose the corresponding attack strategies for the three main attack directions mentioned above:

The first is to carefully select a customer base. The famous German management scientist Wolfgang Mewes said: "If a company uses all its limited resources to solve a carefully selected customer group, then the company can thrive." Finding exclusive customers, There are three ways to discover niche markets:

See stitches-find a niche customer base in the "gap" of the market, see the timing, immediately "squeeze" to occupy, "drill into", thus forming a unique competitive advantage.

There is nothing out of nothing-to tap the potential or deep desires of customers, use their own products to locate the market, create new customer needs, and serve a completely new market.

Insteadfind the customer base they were overlooked by the market occupants, and by adopting creative offensive strategies, they will have a huge competitive advantage and a long period of profitability, thus steadily occupying the market.

The second is that the unique C brings attraction. "The most interesting products are those that people need, but not exactly those that cater to people's needs," said Levio DeSimon, president of 3M. "If the preferences of consumers are too diverse, standardized products are difficult. Fully satisfied, or difficult for large providers of products or services in existing markets to fully satisfy, then the unique value will be maximized.

The third is to design a unique implementation path. Peter Drucker said: "The changes in distribution channels may not matter to a country's GNP and macroeconomics, but they are important to a company or an industry. Everyone is aware of the rapid development of technology, Noting the changes in the market in terms of globalization and the labor force and demographic structure, but few people care about changes in the distribution channel. "Sometimes, a company's channel strategy may become the only competitive advantage and foundation of the company. But in the past corporate competition strategy, few people have raised them to a strategic position. For a small and medium-sized enterprise, a late-developing enterprise, and a new product in a mature market, niche channels may become a magic weapon to win.

Occupy and maintain the ideal niche market is a broad international market. For Chinese companies to enter this market, direct direct attacks are difficult to receive good results. The most common method is to choose a niche to enter and establish a certain popularity. And brand effects, then promote other related products of the company. Such as Haier entered the US market. But whether it is Haier, Shanda, Dell or CIMC Group, these companies that have grown themselves through niche strategies have entered the door of opportunity of high-speed rotation. To maintain long-term competitive advantages, they must prevent others from entering. Therefore, defending niche markets and building effective market barriers have become extremely important or even the most important issues for niche companies. However, the barrier design of each industry is different. Some may be technical barriers, some may be legal barriers, some may be brands, and some may be prices. Enterprises must combine their own characteristics to quickly establish barriers to entry.

Peter Drucker

Sustainable development of the enterprise When a niche strategy of the enterprise is successful, it starts to pay attention to the future development strategy. Summarizing the late-stage development of some niche companies, we can find the following development strategies. Adhering to monopoly means that the company continues to develop in the niche market it has occupied, and uses brand effects, scale effects, and constantly innovating products and services to attract more customer groups, but only if the company has established solid barriers to entry and Isolation mechanism to firmly control the market. To be controlled by a large company is to sell your shares to a large and powerful company to reduce risks, but still maintain business independence. The division of the company's business is based on the premise that the niche market can continue to be subdivided, and these further subdivided markets have great development potential. The company's business can be divided into related ones, or Simply dividing the original company into several small companies can be regarded as a related diversified development strategy or as a deep professional segmentation of the market. Vertical diversification, that is, the merger of the upstream and downstream of the value chain, or the combination of niche companies that produce different parts of the same product, changes from zero to the whole and improves the overall competitiveness. Compound niche diversification means that after a company has a foothold in a niche market, it can continue to use its existing capabilities and resources to proceed to another niche market. This requires the company's continuous technological innovation and a keen observation of the market. In order to maintain the correctness of choosing the niche point and choose this development strategy, the growth process of the company's niche can become a cycle, which can reduce the company's operating risks, effectively use the company's various resources, and maintain the company's sustainable growth and development. .

There are almost every small business in each industry. They pay attention to certain small parts of the market that are ignored by large companies. In these small markets, they can maximize their profits through specialized operations, that is, to survive in the gaps between large companies. And development. This favorable market position translates as "niche." The companies occupying this market position are called market niche players.

After China's entry into the WTO, market opening and marketing globalization have become inevitable choices for Chinese enterprises. Chinese companies must not only withstand the pressure of competition from multinational companies in China, but also compete with foreign companies on other people's land. Chinese companies entering the international market not only compete with local companies for the market, but also compete with other international companies for market share. The globalization of industries, markets, and customers makes it not the question of whether to engage in global marketing, but how to conduct global marketing. To survive, companies must gain comparative advantage in the global competition they face. Otherwise, they will inevitably be at a disadvantage and even threaten their survival.

Therefore, based on the actual situation that the overall strength of Chinese companies is at a disadvantage, and drawing on the successful experience accumulated by the marketing strategies adopted by Japanese and other companies during their weak periods, why is it wise at this stage to say that Chinese companies adopt a niche strategy in global marketing? ? So how should we implement a niche strategy?

The reality of niche strategy choices

(1) Scarce resources.

The limited marketing resources of Chinese enterprises in the face of market globalization is the fundamental condition for the existence of niche strategies. Chinese enterprises are much scarce in resources such as human, material, financial, technical, productivity, sales, brand, and management compared with multinational companies. Therefore, how to make full use of existing resources and determine reasonable resources The combination to achieve the effect of value-added resources has become a major strategic issue. Under the premise of the existence of a strong competitor, we focus on allocating resources in a narrow market where competitors ignore or disregard but consumers are not well satisfied, which is the principle that must be followed to solve this strategic problem.

(2) Only concentration can form a powerful force.

In the sports events of individual events, if an athlete does not concentrate all his energy on the competition, then the title of the champion is just an unthinkable fantasy. In the competition of collective events, any team must have the first team on the field, and there will be a main attacker. How can other players pass more offensive opportunities to the main attack through fake combat, cover and other combat skills? Use your hands to give full play to the powerful attacking force, which is the key to determining the success or failure of the game. Small and medium-sized enterprises have fewer resources themselves, and if they are dispersed, they will be even more vulnerable. Only by focusing resources in specific areas and specific markets can an advantageous attacking force be formed.

(3) Concentration is the way to survive.

On the domestic battlefield, Chinese companies occupy the right time, place, and people. On the international battlefield, the brutal competitive environment forces companies to focus on resources for survival, because only by concentrating resources in a more niche market can prevent competitors Offensive, only concentration can defeat competitors. If the company has a so-called strategy, but it does not reflect the principle of centralized use of limited resources, but disperses the allocation of the company's resources, then it is difficult for the company to create a stronger advantage than its competitors in the decisive direction and key areas. Will lose the target market, shake or even disrupt the foundation of the company's survival. In short, whether we can choose a niche market for strategic concentration in the process of globalization, or whether we can cause our significant advantages and the absolute disadvantages of our competitors at a certain decision point, is the watershed of strategic victory.

Advantages of niche strategies

Why does the market niche tactic bring huge benefits? The fundamental reason is that the company that conducts the market niche has in fact already fully understood the target customer group, so it can better and better meet consumer needs than other companies. . In addition, market niche players can collect more profits based on the added value they provide. In short, market niche players get high marginal returns, while intensive marketers get only high total returns. So what makes an ideal niche market?

Specialized positioning of niche strategies

The key factor of the market niche is specialization. Through specialization to reflect centralization, the specialization positions available to market niche players are:

(1) Specialization of end users.

Companies can specialize in serving a certain type of end user. For example, Peking University Founder successfully entered the Japanese market by cutting into Japanese news media customers.

(2) Vertical specialization.

Niche strategy

Companies can specialize in serving certain vertical levels in the production and distribution cycle. For example, Xinjiang Delong invested in the integration and integration of the power tool industry chain, leading domestic production at a low cost, and then acquiring US power tool distribution channels to achieve global market goals.

(3) Specialization of small customers.

Many large companies follow the 80:20 rule, focusing 80% of their energy to meet 20% of heavy customers, turning a blind eye to small customers with low profit contributions. We can do the opposite and concentrate 100% of our energy to meet those The company's small customer base. For example, Haier, the first small-capacity refrigerator to enter the US market, just met the needs of American college students.

(4) Specialization of special customers.

A company can sell its products exclusively to one or several major customers. For example, Hunan Foreign Trade Jiali Co., Ltd. integrated domestic citric acid production bases and focused on the supply of citric acid raw materials by Procter & Gamble's US headquarters in accordance with high standards of quality requirements.

(5) Specialization of products or product lines.

The company operates only one product or product line. For example, the experimental equipment company distributes 27 different kinds of home-made desserts in Japan-all produced in small batches, and created according to the combination of Amish recipes and local flavor characteristics.

(6) Processing specialization.

These companies produce special products for ordering customers only.

(7) Professionalization of services.

The company provides the public with one or more services not available to other companies. For example, a bank can take a unique approach, accepting customers to apply for a loan by telephone, and handing cash to customers.

(8) Specialization of sales channels.

These companies serve only one type of sales channel. For example, a soft drink company decided to provide only one large-capacity soft drink to gas stations.

Niche strategy creates niche opportunities

(1) Capturing consumers' troubles.

The key to marketing is to correctly determine the needs and desires of the target customers, and to deliver the products or services expected by the target customers more effectively and more favorably than competitors. These products or services are to meet the needs of consumers or solve their problems. tool. Consumer troubles are business opportunities for businesses.

(2) Targeting the weaknesses of competitors.

Professor Potter, a well-known American business strategist, has passed a rigorous analysis of competitors and concluded that "the best battlefields are those market segments where competitors are not fully prepared, not yet adapted, and are less competitive." Toyota is positioned in the U.S. small car market, but this market is not without its rivals. Volkswagen's small cars are very popular. Toyota hired a U.S.-based survey company to conduct a detailed survey of Volkswagen users, fully grasping the pros and cons of its rivals. In addition to models that meet consumer needs, its efficient and high-quality service network has eliminated Americans difficulty in maintaining foreign cars Concerns; poor heating equipment, small rear seats, and poor interior decoration are complaints from many users about Volkswagen. The disadvantage of the opponent is his own opportunity, and the disadvantage of the opponent is his goal. Based on market research, Toyota accurately outlined a target market divided by demographics and psychological factors, and designed American-style Japanese cars that meet the needs of American customers. The Corolla has finally knocked on the door of the American market with its small, affordable, comfortable, stable and convenient maintenance advantages.

Niche strategy expands niche share

Once you have successfully cut into a niche market, that is to say, you have found a market foothold, "it is better to chase the poor to the poor," and you must start working to expand market share. Let consumers become your loyal customers, continue to consume your products, or old customers bring new customers, and companies may make more profits on the same customers. Electrolux China President Liu Xiaoming was ordered to be in distress. In market research, it was found that Electrolux's failure in the past few years was that the refrigerator it developed did not meet the consumption habits of Chinese people, so it catered to China as much as possible in terms of appearance and function. For people's tastes, I found a special Chinese situation in the use of refrigerators: the Chinese put the refrigerator in the living room or even the bedroom. So he mobilized all Electrolux research and development forces, and in 1998, launched a series of "new quiet world" refrigerators. Because it meets the consumer demand for quietness, the "new quiet world" hits the scene. "Actually, Electrolux's advantages are not only in technology and brand. The height of technology is only relative, and the brand's variables are also very large." Electrolux and Liu Xiaoming both understand the rationale of turning short-term advantages into long-term advantages. Products, second-rate companies sell services, first-rate companies sell brands, and super-first-rate companies sell customer satisfaction. Customer satisfaction is a wealth that is not reflected on the balance sheet. "Electrolux is how customer satisfaction is transformed into Profitable: High customer satisfaction has a good reputation and can achieve repeat sales. Electrolux's series of products can earn profits in repeated sales of the brand. In fact, in Electrolux's new listing of air-conditioning sales at the beginning of the year, 30% of consumers were Electrolux brand affiliates. Repeated sales guided by customer satisfaction are cashing in profits step by step.

Niche strategy

Strategy is the strategy for planning and guiding the overall situation of war. That is, based on the analysis and judgment of the international situation and the political, military, economic, scientific, and technological factors of the opposing sides, scientifically predict the occurrence and development of war, formulate strategic guidelines, strategic principles, and strategic plans, plan war preparations, and guide the implementation of war Principles and methods followed.

Strategy originates from the practice of war and has been used in the military field for a long time. The original meaning is military strategy. Strategy can be divided into different types. It can be divided into ancient strategy, modern strategy, and modern strategy according to the period of social history. There are offensive strategy and defensive strategy according to the nature of operations. According to the type of weapon used, there are conventional war strategy and nuclear war strategy (see Nuclear Strategy). According to the service category, there are army strategy, naval strategy, and air force strategy; according to the duration of operations, there are quick-determination strategy and durable strategy, and so on.

All global issues related to the preparation and implementation of war, and the construction and use of military forces, are issues to be studied and resolved by the strategy. Mainly: struggles to stop and postpone wars; long-term preparations and war preparations to deal with wars; strategic leadership and command after the outbreak of wars; strategic decision-making and disposal to end wars.

When human society has a war, it has gradually formed a strategy. In ancient China, the planning and guidance of the overall situation of war used specific terms such as military strategy, strategy, and strategy to express strategy. Emperor Han Cheng ordered the infantry captain Ren Hong to write a book of soldiers in 26 BC. Ren Hong divided the military books into military power, military situation, military yin and yang, and military skills. Among them, military power is about strategy. The word strategy was first seen in China in the book "Strategy" by historian Sima Biao at the beginning of the Western Jin Dynasty, and it has been frequently seen in historical books such as "Three Kingdoms" and "Yiyi History Strategy Examination". The core meanings of these terms are similar to modern strategic meanings, but they are not strictly distinguished from campaign law and tactics, and sometimes they contain political, diplomatic strategies, and war laws, and their use is not uniform. In the late 19th century, China began to use the word "strategy" to translate the word "strategy." In the 1930s, Mao Zedong pointed out in "Strategic Issues of the Chinese Revolutionary War": "Strategic issues are things that study the laws of the overall situation of war." Mao Zedong's exposition of strategy laid the foundation for the definition of modern Chinese strategy.

Analyze strategically successful cases for generals to improve their ability to plan and guide war. The Eastern Roman (Byzantine) Emperor Morris wrote a military textbook for advanced generals around 580 AD, called "Strategicon", which means the art of commanding or commanding, with the same name as strategy. A. Prussia, late 18th century H. D. In his book "The Spiritual Essence of the New War System," Von Billo distinguishes between strategy and tactics and gives it a definition: "Strategy is the science of military operations outside the horizon and artillery range; tactics are about The science of military operations within the above range. "(On Bourgeois Military Science, p. 30, Military Science Press, 1985). von Clausewitz's definition of strategy is: "the use of combat for the purpose of war." (On War, Vol. 1, p. 175, Commercial Press, 1978). H. According to Romini, "strategy is the art of conducting war on a map, and the art of studying the entire war zone." (Introduction to the Art of War, p. 87, PLA Press, 1986). The definition of strategy is: "An art and science that uses the armed forces of a country to achieve the goals of national policy through the use or threat of force." The Concise British Encyclopedia defines strategy as: "in The science and art of using military means to achieve the purpose of war in a war. "Japan's" Encyclopedia of the World "defines strategy as:" Science and tactics that use power to achieve specific goals. "The" Soviet Military Encyclopedia "is The definition of strategy is: "The component and the highest field of military academics, which includes the theory and practice of the preparation of war, planning and conducting war, and strategic battles by the state and the armed forces." There are many titles of strategy in ancient and modern China and foreign countries with different natures. , The definitions are different, but there are similarities; that is, during a certain period, the construction and use of military Forces to plan and guide the preparation and implementation of the overall situation of war in order to achieve a certain political purpose and a strategy that serves the interests of certain classes, countries, nations and political groups. With the development of strategic theory, some countries in the West have developed higher-level grand strategies, national strategies, national defense strategies, and related development strategies. The concept of strategy has been extended beyond the military sphere and borrowed from many other fields. It refers to the strategy of strategically important and high-level decisions.

In ancient China, strategy was often called strategy, strategy, strategy, strategy, etc. Historical writings of Sima Biao named "Strategy" appeared in the Western Jin Dynasty. The word strategy in English, which corresponds to "strategy," is derived from the Greek word strategys, and its original meaning is "general warfare" or "general doctrine". In modern times, strategy has developed into an important field of military science in various countries in the world. The scope of modern strategies is expanding day by day. Western countries have successively proposed concepts such as "big strategy", "national strategy", and "global strategy". The term "strategy" has been borrowed in various fields, such as political strategy, economic strategy, scientific and technological strategy, diplomatic strategy, population strategy, resource strategy, sports strategy, and so on.