8.2b - Bowman's Strategic Clock

Question 1

Bowman’s strategic clock definition

Answer 1

A model that allows a business to choose the way to position its product or organisation based on the perceived value of the product to the customer and the price of the product

Question 2

What are the eight positions on Bowman’s strategic clock?

Answer 2

1. Low price and low added value
2. Low price
3. Hybrid
4. Differentiation
5. Focused differentiation
6. Risky high margins
7. Monopoly
8. Loss of market share

Question 3

Features of low price and low added value position:

Answer 3

• No real competitive advantage can be achieved
• Product does not have differentiation
• Value for money option
• Price is equal to the low perceived value
• E.g. 99p Store

Question 4

Disadvantages of low price and low added value position:

Answer 4

Competitors can enter the market and dilute market share

Question 5

Features of low price position:

Answer 5

• Done through cost-minimisation
• Business is seen as low-cost leaders of the market
• Customers think they are getting a bargain
• E.g. Primark

Question 6

Disadvantages of low price position:

Answer 6

Price wars may occur

Question 7

Features of hybrid position:

Answer 7

• Done through product differentiation
• Product will have a low price, but will have value in the eyes of customers
• E.g. Ikea

Question 8

Features of differentiation position:

Answer 8

• Done through strong marketing to create a brand image or through a USP
• Customers attracted because they stand out
• High quality products at a fair cost
• E.g. Cadbury

Question 9

Features of focused differentiation position:

Answer 9

• Very high profit margins
• High perceived value is met with a high price
• Product needs to be highest quality for success
• E.g. Gucci

Question 10

Features of risky high margins position:

Answer 10

• High price but no added value offered, so perceived as expensive
• Works in short-term until customers find an alternative
• E.g. gym membership

Question 11

Features of monopoly pricing position:

Answer 11

• High prices taking no consideration of the value given to it by customers
• No alternatives
• Lots of profits can be made but there are laws preventing them from abusing dominant market positions
• E.g. Condor

Question 12

Features of loss of market share position:

Answer 12

• Mid-range price for a product that consumer sees as being low value
• Cheap to produce and business will believe it can add value in some way
• Business in low price and low added value position will take market share
• E.g. Tesco

Question 13

What positions are not suitable in the long-term and why?

Answer 13

6, 7 and 8 because the price is greater than the perceived value

Question 14

What are the influences on which market position to pick?

Answer 14

• Is it a niche market (1 or 5) or is it in a mass market (2,3, or 4)?
• Is the business seen as being a provider of high quality products (3, 4 or 5) or a cheaper alternative (1)?
• Is the business able to make its products stand out (3, 4, or 5) or is it selling similar products to others (1 or 2)
• PESTLE

Question 15

How are Bowman’s strategic clock and Porter’s generic strategies linked?

Answer 15

• Cost leadership to low price position (2)
• Differentiation to differentiation position (4)
• Cost focus to low price and low added value position (1)
• Differentiation focus to focused differentiation position (5)