Abstract
Optimal distinctiveness is a strategy where a company maintains a moderate level of differentiation from the industry standard to balance the conflicting needs for both uniqueness and conformity. This approach has recently gained popularity in research and is seen as a broad positioning strategy. However, the application of optimal distinctiveness across different phases of an industry, as well as how to select appropriate benchmarks for differentiation, remains unclear. To fill this gap, we suggest that companies in the mature phase of an industry should use the prototypes of their specific strategic groups as reference points instead of the broader industry prototype. This method is beneficial because group prototypes help firms clearly recognize the diverse competitive landscape and the legitimacy issues they encounter within their strategic group, thus aiding in managing the balance between conformity and differentiation. Our preliminary analysis, which draws from a comprehensive dataset covering the Canadian property and casualty insurance sector from 2000 to 2020, conforms to this proposition.