Specialization vs. Generalization: Insights For Small Business Strategy

One of the challenging debates that disturb business people in the modern world is whether they should go through the hassle of specialization or whether they should generalize their strategies and deal with multiple projects of selling a variety of different goods and services. The aspect of deciding whether to focus on generalization or specialization strategy is tough for both new and established businesses. However, some small businesses thrive by using specialization while others use generalization approach and still succeed.

Generalization Boosts Economic Diversity of Small Businesses

Generalization leads to the growth and development of small and big businesses in the modern society. When dealing with small businesses, generalization can relate closely to diversity. If a start-up firm diversifies, there is a high probability that it will succeed in the future. It gains a concrete foundation to deal with challenges appropriately. Additionally, diversification makes small businesses more secure economically. For instance, if the company is dealing with multiple products, if it fails to sell properly at a particular period, it will remain stable because the rest will sustain its expenses and operations.

These benefits are the reason why many enterprises in different nations are adopting the aspect of generalization. They are enjoying the merits of diversification, which leads to their expansion. Therefore, they serve more customers every day and increase profitability. Additionally, generalization gives businesses perfect opportunities to branch. If the management realizes that their service delivery and products are paying off efficiently, they can open another branch in the regions near them. The process will open more job opportunities to youths and adults. However, small businesses should always be keen and do research before embracing generalization strategy. It requires proper preparations and awareness of the needs of your customers. For instance, if you want to add new products to your retail shop, you should be conversant with the needs of your consumers and be confident that the goods will satisfy them to avoid making losses.

Specialization Leads to Excellence, Greater Efficiency, and Perceived Value of Small Businesses

Some companies opt to specialize with one product or service. Specialization is a business strategy that is different from generalization. It focuses on specific services, like knee treatment offered by Arthritis Care of Texas. The health center does not provide other services. Their primary focus is to solve knee-related problems.

When you decide to use specialization strategy in your small business, you must produce excellent products or offer perfect services to enhance efficiency maximally. The process will make your customers trust your company because of those high-quality specific offerings. There must be consistency in the production of goods and services when using this strategy. Mostly, if your customers realize that you produce a quality item, they will expect you to have it all the time. Therefore, to avoid disappointing them, you should enhance quality and maintain quantity according to the demand throughout the year.

For instance, Arthritis Care of Texas should offer high-quality knee treatment services all the time. They should be able to satisfy customers’ expectations all the time. Therefore, they should hire experienced knee specialists who possess exceptional skills in the field. The aspect will enable them to maintain their quality of service delivery. 

Merits and Demerits of Each Business Strategy

When you use either specialization or generalization strategy in your small business, you can experience both advantages and disadvantages as explained below.

Pros of Generalization
• Greater ability to adapt to economic changes – Small businesses cope effectively with economic trends. If the demand for one product falls, they will sustain themselves with other products.
• Boosts economic excellence
• Helps small businesses to diversify

Cons of Generalization
• Stiff competition – In the modern society, there are millions of businesses that use generalization strategy. Therefore, the competition for the products and services they sell is high.
• Loss of Focus – If many goods or services of a particular small business fail to sell as per the expectations after a massive investment, the management may lose focus and hope. The aspect may lead to its termination.

Pros of Specialization
• Less competition – Businesses that use the specialization strategy do not face stiff competition because, if their quality of services or products is exceptional, they will gain more customers every day.
• Better for working with small businesses – It leads to upward growth and recognition of small enterprises.
• Leads to consumer satisfaction – Specialized firms satisfy their clients all the time because they deal with high-quality products and services.
• Defines the quality and excellence of small businesses

Cons of Specialization
• Minimal Flexibility
• Makes workers complacent
• Limited Opportunities
However, the debate of generalization and specialization will continue for decades. Small businesses should choose their strategies wisely. Their expected gains or achievements should guide them to choose a perfect approach.

Case Study: Specialization vs. Generalization

Arthritis Care of Texas is a  medical care facility specializes in knee treatment. They have doctors who are specialists in the field of knee treatment of a non-surgical variety. They also offer each patient a customized plan to treat their knees based on their specific issues. Everything that is offered in each treatment plan is on site which means that not one patient has to go anywhere else to complete any part of their specialized treatment plan, so they deal with only their medical specialist at Arthritis Care of Texas and nowhere else. 

Mackenzie SDI is medical facility treats a multitude of afflictions and will offer their patients many non-surgical alternatives to treating their medical issues that may include the latest technological advancements in treatment procedures like laser therapy as well as chiropractic care as opposed to a customized treatment plan. They also have experienced and skilled diagnostic technicians to service their patients, but they also offer a variety of doctors on site who specialize in a variety of areas to service each patient’s needs depending on the treatment that they choose. 

Each of these companies has much to offer the consumer as either a specialization or generalization company. Oftentimes, it is up to the consumer to make the decision on what their personal preference is their search for a product or service. That means that a company has the responsibility of making sure the consumer understands who they are as a company and what they have to offer so that the customer can make as informed a decision as possible.

The important thing is that having a business strategy at all is the first step and the most important one whether it is one of generalization or specialization in your industry.

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