Final answer:
A focus strategy entails a firm serving the specialized needs of a market segment with differentiated products, often leading to competitive advantage by concentrating on core competencies.
Step-by-step explanation:
When implementing a focus strategy, the firm seeks to serve the specialized needs of a market segment. This approach involves concentrating on a narrow market and tailoring its products or services to the specific preferences of that particular group. By doing so, a business may offer differentiated products that stand out in terms of physical aspects, location, intangible aspects, or perceptions.
Evidence suggests that concentrating on a core competency, by focusing on one or just a few products, is often more successful than attempting to cater to a wide range of products. This focused approach can create a unique value for customers who are looking for specialized offerings which, in turn, can lead to a competitive advantage and possibly higher profitability for the firm.