Today! Most of the business strategy managers pro-founding certain sets of rules with these rules they are ready to respond to high level competitiveness and market changes for competing successfully business organizations. They need to refine core competencies in a race of level strategy customer acquisition to stay ahead of rivals.
According to market research rivals quickly copy the current trend try to win the market competition by competitive strategy for a temporary profit but not able to survive because of the lack to distinguish between operational effectiveness and strategy.
As you know operational effectiveness and strategy both are responsible for the essential performance of any organization but both work in different ways.
A company can outperform rivals only when it delivers greater value to its customer or creates a comparable value products/services at a lower cost. Ultimately, the optimum competitive advantage profitability for a company is depending upon the cost or price that drive from hundreds of activities including to create, produce, sell, and deliver products and services.
Cost is the consequence of performing activities but cost advantages are the outcome of 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 level of business with certain business objectives.
For example: In 1980s Japanese business plans were so far ahead of the rivals in terms of competitive position of operational effectiveness, as they were delivering the same product at lower cost and superior quality.
Three Key Principles regulate strategic positioning:
“Strategy is responsible for the creation of 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 broad needs of many customers.
- Strategy leads the company to save product/service cannibalism and acknowledge not to do a list of activities.
- Collaboratively, some of the competitive activities are incompatible as they are work to win one business area at the cost of loss of another business area.
The strategy allows win-win situation by implication of the most suitable set of activities that can easily fit into the ongoing company’s activities and ready to reinforce one another. Some of the time due to lack of company’s vision and do not have any unique idea to work, the company start buying up rivals in order to sustain the business.
How strategic positioning comes into existence
Basically, three distinctive sources are responsible for strategic positions first based on producing products and services varieties independent from customer segmentation.
The second basis for positioning i.e. need-based positioning means a company’s products and services are serving all the need of a particular group of customers. Customers are having different needs those are ready to fulfil by a tailored set of activities.
Some of the customer’s 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 depending upon customers segmentation who are accessible in different ways but also having similar set needs at some point. It is also called access based positioning, access to customers generally based on a certain set of activities.
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Thanks Author! for this mindful article.
Hope you be continue with further information.