Competing in Tough Times: Business Lessons from L.L.Bean, Trader Joe’s, Costco, and Other World-Class Retailers

Chapter 4. Differentiation Strategies I: Effective Human Resource Strategies

A retailer can differentiate itself from its direct and indirect competitors (both retailers with similar formats, as well as other store formats that sell the same or similar goods and services). There are several major benefits to a differentiated strategy. One, a differentiated strategy is difficult for a competitor to copy. Although a competitor can easily match a retailer’s price, it is substantially more difficult to compete on the basis of a distinctive private label brand or a strategy based on excellent levels of customer service. Two, economic theory suggests that price competition has less of an effect on retailers that are viewed as distinctive. Three, ...