What business-level strategy involves focusing on a particular group of customers by offering unique or customized products?

The strategy that involves concentrating on a specific group of customers by providing unique or customized products is known as focused differentiation. This business-level strategy aims to meet the specific needs and preferences of a narrow market segment, allowing a company to deliver offerings that are distinct from those of its competitors. By tailoring products or services to the unique tastes or requirements of this targeted audience, the company can create a strong brand loyalty and usually commands higher prices due to the perceived added value of its differentiated offerings.

The effectiveness of this strategy is rooted in its ability to leverage niche markets, where businesses can thrive by being specialized rather than trying to appeal to the broader market. This approach contrasts with other strategies that may seek to dominate a market through broad appeal or through cost reductions, which do not focus on delivering unique characteristics tailored to specific customer needs.