Product / Service Differentiation - Strategic Goal 

Definition: 

Product / service differentiation can be the goal of operations within a business. 

The goal is to produce value offerings that are different from competitors. 

This approach uses innovation, research and development (R&D) to create new products, services and offerings for customers in a market.

Purpose: 

To gain sales and market share by offering unique items  that competitors cannot imitate. Being the ‘first mover’ is risky, but full benefits flow to the firm that is the first to offer new products / services (eg driverless cars). Target is NOT costs, but spending money to find ways to access new markets to generate revenue at higher profit margins. (Google, Apple)

Related to positioning and differentiation marketing strategies.

MOST businesses aim to both reduce costs and continually offer new products / services. 

The operational processes and cost structure of firms that pursue cost leadership are very different to those that pursue product / service differentiation.