BACKGROUND
A
large national mortgage company in a fragmented
industry implemented a successful differential
strategy. After five years, the company was the
market leader with above average performance in
profitability and low turnover. When the company’s
value declined and the industry returned to normal,
the Loyalty Research Center was hired to identify
the problem and determine a strategy to improve and
maintain value scores.
SITUATION
The company was the first in the
industry to implement a differential
strategy, and initial analysis
revealed that this had created a
large value gap advantage. Over
time, competitors began to imitate
the company, causing the value gap
advantage to narrow. Based on this
finding, it appeared that the key to
regaining the value gap advantage
was to prevent the competition from
imitating the company’s strategies.
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