Creating Strategic Global Market Positions

By M. Isi Eromosele

Strategic positions emerge from three distinct sources, which are not mutually exclusive and often overlap.

First, positioning can be based on producing a subset of an industry’s products or services. This is called variety-based positioning because it is based on the choice of product or service varieties rather than customer segments.

Variety-based positioning makes economic sense when a company can best produce particular products or services by using distinctive sets of activities.

A second basis for market positioning is to serve most or all the needs of a particular group of customers. This is needs-based positioning, which comes closer to traditional thinking about targeting a segment of customers.

It arises when there are groups of customers with differing needs, and when a customized set of activities can serve those needs best. Some groups of customers are more price sensitive than others; demand different product features, and need varying amounts of information, support and services.

The third basis for strategic positioning is that of segmenting customers who are accessible through multiple channels. Although their various needs are similar to those of other customers, the best configuration of activities to reach them is variable.

This is access-based positioning. Access can be a function of customer location or customer scale or of anything that requires a different set of activities to reach them using the best conduits.

Positioning is not only about carving out a market niche. A position emerging from any of the aforementioned sources can be broad or narrow. Focused competitors thrive on groups of customers who are over served (and hence overpriced) by more broadly targeted competitors, or underserved (and hence underpriced).

Whatever the basis – variety, needs, access or some combination of the three, positioning requires a unique and customized set of activities because it is always a function of differences in activity processes.

However, positioning is not always a function of differences on the demand or customer side. Variety and access positioning, in particular, do not rely on any customer differences. In practice, however, variety or access differences often accompany needs differences.

The essence of strategic positioning is to choose and implement activities that are different from rivals’.

Strategic competition can be thought of as the process of creating new positions that attract customers from their established positions or draw new customers into the target market.

Strategic positioning is often not obvious, and finding them requires creativity and insight. New entrants into market niches often discover unique positions that have been available but simply overlooked by established competitors.

New entrants can prosper by occupying a position that a competitor once held but has ceded through years of imitation and straddling. And entrants coming from other industries can create new positions because of distinctive activities drawn from their other business and market experiences.

Most commonly, however, new positions open up because of change. New customer groups or purchase occasions arise; new consumer needs emerge as societies evolve; new marketing and distributing channels appear; new technologies are developed; new machinery or information systems become available.

When such changes happen, new entrants, unencumbered by a long history in the industry and/or market, can often more easily perceive the potential for a new strategy for competing and growth.

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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