The Strategist's Choice: Segmentation

Segmentation is vital in determining the most attractive part of a market to enter - or create, and for established firms in deciding how to allocate resources among different segments. The ability to identify and shift resources to attractive segments can help a company outperform the industry average by a significant margin. In the PC industry, Dell Computers has been highly effective in focusing on products and customer groups that offer higher margins. Its direct distribution model allows it to analyze profitability on a customer-by-customer basis.