Pattern description

This pattern describes the strategy of a company to focus on the upper side of society's pyramid. This allows a company to distinguish its products or services greatly from others. High standards of quality or exclusive privileges are the main focus to attract these kinds of customers. The necessary investments for these differentiations are met by the relatively high prices that can be achieved - which usually allow for very high margins.

Inventive problems

Application examples

Lamborghini was founded in 1963 by Ferruccio Lamborghini. His company’s small-scale or limited edition approach to the manufacture and sale of high-powered sports cars makes for high prices. Its wealthy clientele is happy to respond, encouraged by the company’s policy of close customer contact and comprehensive support packages. Thanks to this strategy, Lamborghini is able to realise high margins to finance development, production and marketing. Customer orders are driven by the exclusive nature, performance and image of the products, with resultant high revenue and profits for Lamborghini. The company’s crest prominently displays Murciélago, a bull that survived a bullfight in 1879 even though it was pierced by 24 lances and was later pardoned for this astonishing feat. The crest symbolises strength. When the company was first established it differentiated itself from its competitors through the superior power of its motors. In the second year of its existence, Lamborghini surprised car enthusiasts everywhere when it introduced the twelve-cylinder 350 GT that outshone all of Ferrari’s cars at the time. In 1966 Lamborghini introduced the Miura, which with its 350 horsepower engine could reach speeds of almost 300 km/h.

Jumeirah Group develops Ultimate Luxury hotels. The company’s portfolio includes the Jumeirah Beach Hotel, Emirates Towers, as well as what is probably the most famous and luxurious hotel in the world, the Burj al Arab in Dubai. The hotel’s impressive height of 321 metres and its inimitable sail shape are a magnet for the wealthiest. Officially awarded with five stars, it is considered the most luxurious hotel in the world, far exceeding the requirements for a five-star hotel (some rate it as the world’s only seven-star hotel). Its ostentatiously spacious and luxuriously furnished suites are between 169 and 780 square metres in size. Guests wishing to take a break from the lavish interiors can use the hotel’s helicopter or one of several Rolls-Royce cars offered by the hotel to make a foray into the city. These high standards of service are costly to maintain, but offset by high margins.

References

The Business Model Navigator: 55 Models That Will Revolutionise Your Business