Introduction
Dfs Furniture Plc Company is one of the leading retailers of sofas based in the UK within
the past five decades (DFS Furniture Plc, 2020). Their strategy is focused on being the ‘leading
sofa retailer in the digital age, meeting customer expectations, stakeholder demands, and
delivering growth whilst integrating sustainability into the way we do business.’ (DFS Furniture
Plc, 2020). For the survival of any company, sales have to be made. Dfs Furniture Plc has,
therefore, become a leading company for a long time due to the strategy that it uses, which is
based on the Michael Porter Generic Strategy.
Dfs Furniture Plc and the Generic Strategy
Dfs Furniture Plc has a high recognition of its market segments. The sofa industry has
extreme competition and has also been affected by the covid-19 pandemic as sales were seen to
decline over the pandemic's initial occurrence (DFS Furniture plc. 2020). All these factors have
come together to make it a challenge for Dfs to sustain the market leadership position while at
the same time increasing their market share. To that effect, there is a need for this company to
exert more effort. Being a global brand, Dfs Furniture Plc has used strategies to align with
Porter’s generic strategy, which has ensured that the company gets a strong edge over the
competitors in the consumer markets.
To that effect, the company is focused on the use of a combination of cost, focus, and
differentiation strategies that would handle the competitive pressure. For this company to
experience customer base expansion coupled with sales growth, they have to focus on all these
3
strategies simultaneously. In the next section, there is a look at how the Dfs Company uses
Porter’s generic strategy in its operations.
Cost leadership
This is a strategy that involves managing costs in a manner that brings some competitive
advantage. For Dfs Company, this strategy is there to preserve its leading position within the
industry and the market. The company's main customer target is the customer with an average
income, which makes the largest part of the consumer market mix all around the world. The
average income earners find value in the pricing fact, coupled with cost leadership. Additionally,
the company brings affordability and accessibility of its products across the globe. This is
something that promotes brand awareness while maintaining a strong competitive advantage.
Apart from the above, the company offers some discounts as well as coupons so as to bring forth
better sales while handling the pressure from competitors. Through this, the company would also
increase its brand popularity and promote consumption.
Moreover, this company focuses on using both its showrooms and online platforms to make
its products more accessible and conveniently presented to the consumer. Looking at the current
times where the covid 19 pandemic seems to have shaken most customers when it comes to
interactions, the company has found an easier way, which is both convenient and cheap, to reach
its customers. They have created websites, social media platforms, and other digital channels that
allow their customers to make their orders fast and affordable.
From the above, it is evident that the cost leadership strategy that is used by Dfs is one that
reflects the benefits of the generic strategy through bringing forth recognition, achieving high
sales, increasing the customer base, and encouraging consumption through an emphasis on
4
product accessibility and affordability. The next section is focused on the differentiation strategy
by Dfs, which is used together with cost strategy.
Differentiation strategy
Another stream of the generic strategy is differentiation. For the achievement of growth, Dfs
uses this strategy together with cost leadership. The company adopts this strategy, which ensures
the expansion of their customer base by making ban emphasis on their products' uniqueness. The
company has done this by embedding its innovations and addressing its consumer’s rising health
concerns. Through an extension of its product lines in line with sustainable objectives and trends
of the customers, the company has managed to differentiate its products. Through this, they have
managed to come up with a strong and loyal group of customers.
Additionally, Dfs uses heavy investment in its marketing strategy and celebrity endorsement,
which differentiates its products and services. The main advantage that influences this is their
strong foothold and having a good experience over the past five decades. They then position their
products in a manner that stands out from the best. Moreover, this strong presence throughout the
globe highlights their manner of reaching a broader customer base. Apart from this, the company
has come up with a unique logo that leaves a strong brand image in their consumers’ minds. As
well, Dfs uses a strategy that provides for different tastes and styles which meet the needs of the
consumer. There are innovative tools that they use, which bring forth differentiated services that
appeal to customers, which increases their preference for Dfs products over other rivals.
Focus strategy
The third generic stream relates to the focus strategy. This is a strategy that directs companies
in focusing on the existing resources, and then they would extend their target segments. In the
5
adoption of such a strategy, services are provided for specific segments whereby competitive
advantage is then based on the niche marketing.
Looking at the manner that Dfs uses the focus strategy, it is noted that low costs, coupled with
the offering of the best value for the consumer, is present. In the low cost, the company strives to
serve the needs present in the niche market segment using affordability as well. The best value
strategy comes in through an emphasis on taste, design, and style of products. The value is
aligned with the needs of the consumer.
By focusing on the product attributes, Dfs has been able to revise its branding strategies
and bring forth product development. Dfs has used product development for the achievement of
growth. The companies that seek growth do this modification of products in the regions where
there are limited growth opportunities. In the past, Dfs has sought to introduce new lines of
products while modifying others to suit their consumer preference. The targeting of existing
customers using new products uses less time, effort, and investment due to the company having
already leveraged their developed brand awareness as well as customer loyalty.
Extending the product line allows Dfs to address some of the risks they encounter
through losses experienced from other product lines with the profit that they may receive from
others. Additionally, it is important to understand that the importance of using the product
development strategy is connected to improving the investment of research and development for
new products. To do all this, the company has worked on three things. The first one is putting a
focus on offering new products which bring some close association to the current product lines.
The second thing is that they direct their concentration on offering new products that work to
align with the buying behavior of the current consumer. Finally, they work to develop products
6
that refresh the current ones to appeal to customers. Through the assessment of the current
consumer, they are able to get data on what they prefer and then use research and development to
work on these needs. For example, due to a growing environment-conscious consumer base, it is
relevant that they align their products with the new trend of sustainability.
Position within the business life-cycle
Business life cycles reflect the stages of development that a business undergoes in its life.
There are challenges that new businesses face at first, which require them to deal with prior to
reaching a downfall. Therefore it is important to be aware of where a business’s life is so that
issues to deal with at that stage would be countered. Below is an illustration of the business life
cycle. The next section will pay special attention to Dfs’ position within this cycle.
For Dfs, they are positioned at the growth phase. In this phase, one can note that the
existing relationship between the business and clients has become good. There is a decrease in
7
turnover while they do not worry anymore about making payrolls or keeping employees. As
well, the existing clients are well able to ex-lain the Dfs business to others as the brand is now
popular.
Dfs is seen to have solidified its stance within the marketplace. It has also managed to
turn their focus inward as they build their teams while hiring top professionals to run their
operations. Most of their time is spent on gaining knowledge and activities related to the growth
of the company while making identifications of the limitations present. For instance, in the covid
19 pandemic times, it was noted that sales were declining due to less interest in purchase by
consumers. Through the management of different activities, the company has been able to
mitigate this issue today. Additionally, this stage requires heavy investment, which Dfs has
cordially injected into their projects. Their profits are given back to the funding of other growth
projects (Groot, 2010).
Conclusion
Porter’s generic strategy is a means of growth for companies like Dfs, which are in their
growth stages of the business life cycle. Herein is an explanation of how the company has used
cost, focus, and differentiation to counter issues related to sustainability, competition as well as
the current challenge brought on by covid 19 pandemics with respect to the decline of sales.
8
References
Groot, M. (2010). Managing financial information in the trade lifecycle: A concise atlas of
financial instruments and processes. Boston: Boston. Academic Press.
DFS Furniture plc. 2020. Annual Report & Accounts 2020. Retrieved from
https://www.dfscorporate.co.uk/media/53495/DFS_AR2020.pdf