Sunday, April 5, 2015

Product Differentiation

Cessna has a large product line and has differentiated itself very broadly throughout its history.  While venturing into the LSA market was not as successful as initially imagined (covered in my last post), the rest of Cessna's products cater to several different markets and therefore can protect itself against several different threats.

For Cessna, this helped protect the company during the downturn of the 1980s-90s.  During this time period, piston aircraft sales nosedived from a high of over 14,000 units in 1978 to less than 1,000 in the late 1980s.  The numbers have never fully recovered, mostly due to increased operating costs, but Cessna was forced to discontinue its flagship piston aircraft, the 172, for over a decade (1986-1998).  If the company was focused just on small piston aircraft, it likely would not have survived this extended slump.  However, with since it had differentiated its products, Cessna was able to survive and reintroduce a much beloved aircraft.

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