The Differentiation between Core and Context in Corporate Strategy

In corporate strategy, “core” is an element or product- or service-differentiation that brings about customer preference at the time his purchase decision. “Context” is an adequate element of differentiation: context is an acceptable performance in all many attributes of the product- or service-offering. In comparison to a core, a context offers no reward for outperformance, but invites penalties for underperformance.

Southwest Airlines As an example, for years, Southwest Airlines pursued the differentiation strategy that is characteristic of the retail industry: lower ticket prices for its customers supplemented with availability and selection. On-time flights, careless baggage handling, frequency of complaints, cancelled flights, caring flight attendants, etc. were elements of the context. It was critical for Southwest Airlines not to under-perform in these elements, but these elements offered no reward for over-performing.

'Dealing with Darwin: How Great Companies Innovate at Every Phase of Their Evolution' by Geoffrey A. Moore (ISBN 159184214X) Recommended Reading: ‘Dealing with Darwin’ by Geoffrey Moore. The subtitle is “How Great Companies Innovate at Every Phase of Their Evolution.” Geoffrey Moore is the Managing Partner at strategy consulting firm TCG Advisors and a respected authority on corporate strategy. Dealing with Darwin is an excellent resource for product strategy, product marketing, and corporate strategy and in dealing with growth, mature, and declining markets.

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