Bowman's Strategic Clock Flashcards
What is Bowman’s Strategic Clock?
A business model that explores the options for strategic positioning
What two dimensions determine the strategic options?
Price and perceived value
What are the eight positions around the clock?
1) Low price and low added value
2) Low price
3) Hybrid
4) Differentiation
5) Focused differentiation
6) High price and standard value
7) High price and low value
8) Low value and mid price
What is the low price and low added value strategy?
Charging low prices but selling inferior goods
What do businesses need to do in order to make a low price and low added value strategy work?
Benefit off economies of scale
When does a low price and low added value strategy work best?
During a recession: people want to buy the cheapest possible products
What is the low price strategy?
Charging low prices but not selling inferior goods to become the cost leaders in a market
What do business need to do to make a low price strategy successful?
Benefit off economies of scale or minimise costs in other ways
What is the hybrid strategy?
Charging mid range prices but offering consumers some kind of differentiation
What customers does a hybrid strategy attract?
Customers who seek better quality goods but don’t want to pay vast prices
What is the differentiation strategy?
Charging mid prices (or in some cases higher) and offering customers increased value by having a USP
What is the focused differentiation strategy?
Charging higher prices but operating in a niche marketplace
What is a high price and standard product strategy and why doesn’t it work?
Charging high prices for products with a modest amount of value: doesn’t warrant the high prices
What is a high price and low value strategy and why doesn’t it work?
Charging high prices for low value products: consumers are unwilling to pay premium prices for low value products
What is the one situation in which a high price and low value strategy works?
When the firm operates as a monopoly
