Marco S. Giarratana

Community-focused strategies

This article introduces the notion of community-focused strategies to refer to the set of actions, activities and policies that firms undertake to establish connections or relational links with one or more target communities of (potential) customers. Drawing on social identity theory and strategy research, this study begins with a proposed taxonomy of different community-focused strategies. Then it illustrates how such strategies contribute to the creation of competitive advantage and explores their boundary conditions. Finally, the authors offer implications for theory development and practice, as well as suggestions for further research.

Building and Sustaining a Product Differentiation Advantage Through a Community-Focused Strategy

An important reason people join communities is to satisfy their identity needs. Firms might exploit this societal tendency to gain competitive advantages and thus stronger economic profits than rivals. By reviewing the strategic approach adopted by Kiehls, a U.S. cosmetic producer and retailer, this study investigates a potential mechanism by which firms interact with communities to build a product differentiation advantage. Because it adheres to and supports a well-defined set of values, Kiehls not only achieves community membership and gains legitimacy but also strengthens the sense of identity that the relevant communities provide to members. These investments prompt reciprocal community member behaviors, which the company channels into its customer knowledge development process. Finally, this study describes how firm–community interactions protect the firms differentiation advantage by turning its products into symbols of the communities to which Kiehls customers belong.

Market Share and Market Size Dynamics: Product and Brand Strategies in a Competitive Scenario

This article analyzes the impact of product and brand strategies on firm performance, by separating their effects through the channels of market size vs. market share dynamics. In industries characterized by economies of scope from production, but not from demand, the articles predicts that higher product diversification and lower brand breadth (brand very specific to the product attributes) command higher performance, both in terms of market share and market size dynamics. However, the combination of high product specialization and brand breadth (brand extendable to several products) could generate positive market size effects. The theory is tested using data from the US apparel industry.