Pearl India Ltd. is a major packaged food company which dominates in some sectors like snacks, diary, biscuits and instant meals. It offers high…

Pearl India Ltd. is following the Differentiation Strategy propounded by Michael Porter. Differentiation strategy is aimed at a broad market and involves creation of products or services that are perceived by customers as unique. The uniqueness may be associated with product quality, features, brand image, technology or customer preferences. Because of differentiation, the business can charge a premium price and gain competitive advantage. In the given case, Pearl India Ltd. offers high quality and unique food products matching customer tastes and preferences. It continuously enhances its brand image and charges premium prices for which buyers do not negotiate. The special features of its products help it gain a strong competitive position over rivals. Disadvantages of Differentiation Strategy 1. In the long run, uniqueness may be difficult to sustain as competitors may imitate product features. 2. Charging very high prices for differentiated products may force customers to switch to alternative products. 3. Differentiation strategy fails if the basis of differentiation is not valued by customers.