Lately I’ve been pondering whether the niche market differentiation strategy of Olympus is at the root of so much ‘Olympus bashing’ on the internet. Being a long-time Nikon 1 owner, I’m certainly accustomed to a camera brand being underrated and criticized. It seems that for many people, and even some photography websites, there is a discernible anti-Olympus bias. Perhaps this is a natural result of Olympus following a niche market differentiation strategy.
NOTE: Click on images to enlarge. All photographs were captured handheld within a one hour period during a visit yesterday to Windemere Basin Park in Hamilton Ontario. Images have been added to serve as visual breaks.
I suppose a good place to start is to do a quick review of basic strategic choices that a business can make. It is also important to state that one business strategy is not better than another. They’re just different. And, as market conditions shift over time, business strategies can also change.
The first strategy choice is whether a company wants to sell to a broad market or a niche one. Broad market competitors like Canon, Sony and Nikon develop a wide range of products with the basic intent of being ‘all things to all people’.
The goal is to build market share across a range of various buyer segments. To a large degree profits are directly related to economies of scale. Broad market competitors then have to decide if they want to compete on cost or on differentiation.
Broad market cost competitors do not tend to be at the leading edge of innovation with their products. They often offer their buyers a sufficient level of features and performance to meet the needs of a good cross section of the market. This also allows them to build acceptable products with perhaps fewer features or performance, at lower cost than their competitors.
Canon is an example of a broad market cost competitor. The brand, at least from what I see in Canada, is an aggressive price promoter. Until fairly recently the sensors in Canon cameras lagged behind similar Sony and Nikon products. This is an example of ‘good enough’ product quality and performance. From a market share perspective, Canon’s strategy has been successful over the years.
Sony and Nikon are brands that are more closely aligned with a broad market differentiation strategy. Brands that follow this type of strategy tend to provide higher performance levels with their products, for example sensor performance. They will also bring some innovation and differentiation to their products. Nikon 1 is a good example of an attempt by Nikon to differentiate part of its product offering. There’s no need to dissect the reasons why the Nikon 1 product line failed. The fact that it was even introduced is an example of a differentiation strategy.
The other basic strategic choice is to be a niche market competitor rather than broad market. Companies with this strategic orientation do not try to be ‘all things to all people’. They look at the needs of specific market segments, then focus their products and marketing on those segments. The more focused and disciplined a company is with their efforts to be the best solution for specific market segments, the more successful their strategy will be. Once customer segments are identified, niche market competitors then decide if they are going to compete on cost or on differentiation.
At the present time I think the two camera manufacturers that are clearly using niche market differentiation strategies are Fujifilm and Olympus. The X-Trans sensor that Fujifilm developed is a clear example of product differentiation.
We can look at the decision of Olympus to stick with the M4/3 format and to bring innovative product features like 7-stop IBIS performance, IPX1 weatherproofing, Intelligent Subject Tracking, Pro Capture, Live ND, Live Composite, and Handheld Hi Res mode, as examples of a differentiation strategy.
A typical risk of a niche market differentiation strategy is that a company’s products may not be considered out-of-hand by some customers. For example, I would never consider buying a Fujifilm camera because of the incompatibility of the X-Trans sensor with some photographic software that I own and quite enjoy using.
That doesn’t make Fuijifilm cameras and their X-Trans sensors good or bad. It simply means that the potential benefit of that point of sensor differentiation for Fujifilm is overshadowed by the software incompatibility issue for me. And, is actually a negative as I ignore Fujifilm cameras completely because of its sensor. So, I am not a niche market target customer for Fujifilm. Other folks could be.
When we look at the most common criticisms of Olympus they focus on price and sensor size. For many consumers a smaller sized sensor is equated to ‘cheaper’ in their minds. The market price of Olympus cameras does not make sense to them based on the size of the M4/3 sensor.
If the dominant purchase criteria of those buyers is sensor size… and if they don’t value weatherproofing, IBIS performance, the comparatively small size and weight of the Olympus system, and a host of innovative image capturing technologies… they will never be Olympus buyers. With a niche market differentiation strategy a company needs to stay focused on market segments that are best served by its unique product attributes. Other segments do not represent good market potential.
Highly regarded (and some award winning) nature photographers like Petr Bambousek, Andy Rouse, Scott Bourne and Tim Boyer didn’t start using Olympus camera gear on a whim. Like other photographers those decisions happen when the capability and unique characteristics of camera equipment meets their needs better than other products.
This brings us back to Olympus following a niche market differentiation strategy, and how that may contribute to general ‘Olympus bashing’ on the web, and by some websites in particular.
When segments of buyers don’t value the basic value proposition of a brand, they will criticize it. C’est la vie!
Olympus does have a clear market strategy, and if you want some interesting details on it you may want to take some time to read a recent in-depth interview done by Imaging Resources.
In this interview, the Olympus executive clearly states that the company has no intention to compete on price. Their strategy is focused on the unique characteristics and capabilities of their M4/3 camera equipment. They intend to pursue segments of the market that represent the best fit for their brand. Nature/birding is one such segment that is identified in the article.
The comparatively small size and weight of Olympus M4/3 camera equipment may appeal to you. You may be interested in IBIS performance and how it enables handheld photography at extended shutter speeds. Image capturing features like Intelligent Subject Tracking, Pro Capture, Live ND, Handheld Hi Res, in-camera focus stacking, Live Composite and Starry Sky may peak your creative interests. Being able to face any weather conditions with an IPX1 rated camera may give you a feeling of confidence. On the other hand, none of these factors mentioned may be of any interest to you whatsoever.
Ultimately you’ll decide whether the attributes of M4/3 Olympus camera gear makes sense for you or not, based on your specific camera needs. Just like you will evaluate the value proposition of other camera brands. And, that’s how it should be.
A niche market differentiation strategy is all about a company focusing its efforts on a particular segment of buyers where its products are the best fit.
Photographs were captured hand-held using camera gear as noted in the EXIF data. Image were produced from RAW files using my standard process.
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