Today! Most business strategy managers are pro-founding certain sets of rules with these rules. They are ready to respond to high-level competition and market changes for competing successful business organizations.
They must refine core competencies in a race for level strategy customer acquisition to stay ahead of rivals.
According to market research, rivals quickly copy the current trend and try to win the market competition by competitive strategy for a temporary profit but cannot survive because of the lack of distinction between operational effectiveness and strategy.
As you know, operational effectiveness and strategy are both responsible for an organization’s essential performance, but both work differently.
A company can outperform rivals only when it delivers greater value to its customer or creates comparable value products/services at a lower cost.
Ultimately, the optimum competitive advantage profitability for a company depends on the cost or price that drives hundreds of activities, including creating, producing, selling, and delivering products and services.
Cost is the consequence of performing activities, but cost advantages result from performing particular activities more efficiently than competitors.
Similarly, strategic positioning is also a result of performing a different set of activities performing the same activities in different ways for levels of business with certain business objectives.
For example: In the 1980s, Japanese business plans were so far ahead of the rivals in terms of the competitive position of operational effectiveness. They were delivering the same product at a lower cost and superior quality.
Three Key Principles regulate strategic positioning:
“Strategy is responsible for creating a unique and valuable position inside the competitive arena, i.e., involving a particular set of strategies.”
- Serving few needs of many customers.
- Serving broad needs of few customers.
- Serving the broad needs of many customers.
- Strategy leads the company to save product/service cannibalism and acknowledge not to make a list of activities.
- Collaboratively, some competitive activities are incompatible as they work to win one business area at the cost of losing another.
The strategy allows a win-win situation by implication of the most suitable set of activities that can easily fit into the ongoing company’s activities and are ready to reinforce one another.
Due to the lack of the company’s vision and no unique idea to work, the company starts buying up rivals to sustain the business.
How strategic positioning comes into existence
Three distinctive sources are responsible for strategic positions based on producing products and service varieties independent from customer segmentation.
The second basis for positioning, i.e., need-based positioning, means a company’s products and services serve all the needs of a particular group of customers. Customers have different needs ready to be fulfilled by a tailored set of activities.
Some of the customer groups are more price-sensitive than others. This variation-based positioning arises when customers need different products and services on different occasions.
The third way of strategic positioning depends upon customer segmentation, accessible in different ways and having similar needs at some point. It is also called access-based positioning; customer access is generally based on a certain set of activities.