Its main objectives of specialization strategy are: achieving highest level of skills in the field and providing a competitive advantage.
Types of specialisation strategy
Specialization may have a different form and selecting the right one, depends on the competitive position of the company and the phase of the life cycle of the industry:
- extensive specialization - increasing the volume of production by which the company experience growth in expertise,
- passive specialization - keeping the same level of development of existing business areas. It is used in maturity and decline phases of life cycle.
- restrictive specialization specialization in only one of the existing areas with a total cut off from the rest. Used in growth phase, strategy of niche market, which consists of either the verification of existing structures and activities focusing on this, in which the company can easily regain a good position. It also involves focusing on the new area by taking advantage of the experience gained in other areas. (maturity phase and difficult situation on the market)
- specialization by diversifying - used in time, when success depends on the development of technologies with which there are choices of new expertise,
- specialization by re-concentration - is related to the rationalization of operations and is necessary when the situation deteriorates and company must stop diversification. It can be achieved by market expansion or marketing diversification.
- Mayhew, B. W., & Wilkins, M. S. (2003). Audit firm industry specialization as a differentiation strategy: Evidence from fees charged to firms going public. Auditing: A Journal of Practice & Theory, 22(2), 33-52.
- Norton, E., & Tenenbaum, B. H. (1993). Specialization versus diversification as a venture capital investment strategy. Journal of Business Venturing, 8(5), 431-442.