Concentration Strategy - Explained
What is a Concentration Strategy?
Written by J. Mance Gordon
Updated at April 21st, 2024
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What is a Concentration Strategy?
A concentration strategy is when a business focuses on a specific group of clients, a specific product, or a specific geographic market. As the name implies, the primary purpose is to allow the business to concentrate (rather than diversify) their efforts. The idea is that this concentrated effort is more likely to yield expertise, innovation, and efficiencies within the area of concentration.
There are three sub-strategies:
Market Penetration
This concerns acquiring a larger percentage of the existing market for the firms existing products. This is normally done through extensive marketing campaigns.
Market Development
This concerns selling existing products in new markets. A popular method of entering new markets with existing products is to pursue new sales channels. For example, a brick and mortar retail store might enter a new market by selling online. Another example would be expanding into a foreign market.
Product Development
This concerns the creation of new products to sell or deliver within the existing market. The products or services offered may be related. The key aspect is that they are novel to the company and they are selling the products within their existing market space.
Related Topics
- Organizational Strategies
- Growth-Based (Expansion) Strategies
- Inorganic Growth
- Organic Growth
- Diversification
- Concentration
- Integration or Combination (Horizontal and Vertical)
- Asset Acquisition Strategy Definition
- Horizontal Integration - Explained
- Backward Integration - Explained
- Internationalization
- Cooperative Strategy
- Consortium Definition
- Stability and Retrenchment Strategies
- Competitive Strategies
- Contestable Market Theory
- Value Disciplines
- Porter's Generic Strategies
- Differentiation (Strategy)
- Commoditize
- Niche Market Strategy
- Long Tail
- Low-Cost Production
- Resource-Based View of the Firm
- Resource Dependency Theory
- Ansoff Matrix
- Customer-Centric Strategy
- Blue Ocean Strategy
- Overfished Ocean Strategy
- Hedgehog Concept (Strategy)
- Innovation Strategy
- Bleeding Edge
- 3 Horizons of Growth
- Disintermediation (Strategy)
- Strategic Alliance
- Coopetition (Strategy)
- Loss Leader Strategy
- Lean Strategy
- Game Theory Perspectives
- Functional Strategies
- Marketing Strategy
- Zero-Cost Strategy Definition
- Mobile First Strategy Definition
- Operational Strategy