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What Is Stuck in The Middle?

Firms can become "stuck in the middle" if they do not offer unique features to convince customers to purchase their products and their prices are too high to compete on cost. Arby's sandwiches are neither cheaper than competitors nor stand out in taste, hurting their performance. Similarly, Circuit City was squeezed between lower prices at Walmart/Target and better service at Best Buy. To avoid this, firms must clearly choose either a low-cost or differentiation strategy rather than trying to appeal to all customers without excelling in either area.

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AGOCOY Ashley S.
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133 views

What Is Stuck in The Middle?

Firms can become "stuck in the middle" if they do not offer unique features to convince customers to purchase their products and their prices are too high to compete on cost. Arby's sandwiches are neither cheaper than competitors nor stand out in taste, hurting their performance. Similarly, Circuit City was squeezed between lower prices at Walmart/Target and better service at Best Buy. To avoid this, firms must clearly choose either a low-cost or differentiation strategy rather than trying to appeal to all customers without excelling in either area.

Uploaded by

AGOCOY Ashley S.
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Stuck in the Middle

What is stuck in the Middle?


 A firm is said to be stuck in the middle if it does not offer features that are
unique enough to convince customers to buy its offerings and its prices are
too high to effectively compete on based on price. Firms that are stuck in
the middle generally perform poorly because they lack a clear market or
competitive pricing.

Several examples of such firms are illustrated below.

Arby’s signature roast beef Electronics retailer Circuit City


sandwiches are neither cheaper found itself squeezed by the
than other fast food nor are they superior service offer by rival Best
standouts in taste. Perhaps not Buy and the cheaper prices charged
surprisingly, parent company on electronics by Walmart and
Wendy’s has been trying to sell Target. The firm went bankrupt in
Arby’s. 2009 after sixty years in business.

Neither Inexpensive nor Differentiated

 Some firms fail to effectively pursue one of the generic strategies. A firm is
said to be stuck in the middle if it does not offer features that are unique
enough to convince customers to buy its offerings, and its prices are too
high to compete effectively based on price

 Arby’s appears to be a good example. Arby’s signature roast beef


sandwiches are neither cheaper than other fast-food sandwiches nor
standouts in taste. Firms that are stuck in the middle generally perform
poorly because they lack a clear market or competitive pricing. Perhaps not
surprisingly, parent company Wendy’s has been trying to sell Arby’s despite
having recently acquired the company in 2008. Stockholders apparently
agreed with the plan to cut Arby’s loose—the price of Wendy’s stock rose 7
percent the day the plan was announced
Doing Everything Means Doing Nothing Well

 Michael Porter has noted that strategy is as much about executives


deciding what a firm is not going to do as it is about deciding what the firm
is going to do (Porter, 1996). In other words, a firm’s business-level strategy
should not involve trying to serve the varied needs of different segment of
customers in an industry. No firm could possibly pull this off.

Getting Outmaneuvered by Competitors

 In many cases, firms become stuck in the middle not because executives fail
to arrive at a well-defined strategy but because firms are simply
outmaneuvered by their rivals.

“When executing a business-level strategy, a firm must not become stuck


in the middle between viable generic business-level strategies by neither
offering unique features nor competitive pricing.”
Conclusion

This chapter explains generic business-level strategies that executives


select to keep their firms competitive. Executives must select their firm’s
source of competitive advantage by choosing to compete based on low-
cost versus more expensive features that differentiate their firm from
competitors.

In addition, targeting either a narrow or broad market helps firms further


understand their customer base. Based on these choices, firms will follow
cost leadership, differentiation, focused cost leadership, or focused
differentiation strategies.

Another potentially viable business strategy, best cost, exists when firms
offer relatively low prices while still managing to differentiate their goods or
services on some important value-added aspects. All firms can fall victim to
being “stuck in the middle” by not offering unique features or competitive
prices.

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