Strategic Positioning

By M. Isi Eromosele

Competitive strategy, which rests on unique activities, is about being different. It means deliberately choosing to implement a set of activities to deliver a unique set of values to customers. The cornerstone to establishing competitive strategy is strategic positioning.

Strategic positions emerge from three separate foundations, which are not mutually exclusive and often overlap.

• First, positioning can be based on producing a peripheral segment of an industry’s products or services. This is also known as variety-based positioning, which works most effectively when a company can best produce specific products and services using unique and separate sets of activities.
• A second basis of positioning is that of serving most or all the needs of a particular segment of customers. This is also known as needs-based positioning, which is most effective as a form of custom targeting a segment of customers with a tailored set of needs. A critical element of needs-based positioning is that differences in needs will not translate into meaningful positions unless the best set of activities to satisfy the target customers also differs.
• The third base of positioning is that of segmenting customers who are accessible through multiple channels. Although their needs may be similar to those of other customers, the best modes of communication to reach them are different. This is called access-based positioning. Access can be a function of customer location or customer level.

Positioning is not restricted to simply carving out a market niche. A strategic position can emerge from any number of situational market environments. A focused company can target the special needs of a market segment of customers, designing its marketing activities accordingly.

Focused competitors can thrive on groups of customers who are either over served (and hence overpriced) or underserved (and hence under priced). A company may serve a wide array of customers, offering a set of products and services designed to meet their specific needs. At the same time, it can ignore or only partially meet the more idiosyncratic needs of other particular segments of customer groups.

Whatever the foundational basis chosen by a company - be it variety, needs access or a combination of the three - strategic positioning requires a customized set of activities because it is always a function of establishing differences on the supply side, that is in implementing activities. However, on the customer side, strategic positioning is not always a function of establishing differences. Variety and access positioning, in particular do not rely on any customer differences.

The essence of strategic positioning is to choose activities that are different from those of rivals in meeting the personalized needs of ever demanding customers. If the same set of activities were best to produce all varieties, meet all needs and access all customers, companies could easily shift among them and operational effectiveness would determine performance.

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

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