Empirical analysis reveals that differentiation and total quality strategies increase market share and profitability in stalemate industries, highlighting the feasibility of a dual low-cost advantage.
Empirical studies conducted at the Institut de Recherche de l'Entreprise (Lyon, France) show that, in ‘stalemate industries’ (cf. the BCG's typology, 1981), differentiation strategies are effective and profitable alternatives to the usual strategic recommendations. The knowledge of customers' behavior shows up several opportunities for differentiation, hidden by some kind of ‘strategic presbyopia’. Total quality or ‘zero default’ strategy (product quality regularity, punctuality of deliveries, quick response to unexpected orders, quick and correct answers to requests, short delivery times) is the major opportunity for differentiation. Such strategies are compatible with a low‐cost position; excellent companies which succeeded in building this ‘total advantage’ (diferentiation + low cost) over their competitors enjoy the highest market share growth and profitability.
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Calori et al. (1988) studied this question.
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