Bowman's strategic clock- 3.8.2

Question 1

What does Bowman’s strategic clock do?

Answer 1

Explores options for strategic positioning (how a product should be positioned to give most competitive position in market).

Illustrate that business has options of how to position product based on 2 dimensions – price and perceived value.

Question 2

Draw the Bowman’s strategic clock diagram.

Question 3

What are the 8 positions in Bowman’s strategic clock?

Answer 3

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

Question 4

Describe position 1.

Answer 4

Low price and low value added.

Not competitive.
Product not differentiated
customer perceives little value, despite low price.

Question 5

Describe position 2.

Answer 5

Low price

Position look to be low-cost leaders in market.
Cost minimisation required.
Associated with economies of scale- Profit margins low, high volume of output= high profits.

Comp amongst businesses with low price position intense.

Question 6

Describe position 3.

Answer 6

Hybrid

Low price and product differentiation.

Aim persuade consumers good added value through combining low price/ acceptable product differentiation.

Effective, if added value involved offered consistently.

Question 7

Describe position 4.

Answer 7

Differentiation

Offer customers highest lvl of perceived added value.

High quality product, brand awareness and loyalty- success.

Question 8

Describe position 5.

Answer 8

Focused differentiation.
Aims position product at highest price lvl, customers buy product because of high perceived value.

Adopted by luxury brands, aim to achieve premium prices by segmentation, promotion and distribution.

If successful lead to high profit, only best product/ brands do it long-term.

Question 9

Describe position 6.

Answer 9

Risky high margins.

High risk.

High prices without anything extra (perceived value).

Customers buy at high prices- high profits, substitute for better price.

Uncompetitive strategy- premium price without justification, tough.

Question 10

Describe position 7.

Answer 10

Monopoly pricing.

Monopoly in market, (1 business offering product).

Monopolist not concerned about value customer perceives in product- only choice.

Set whatever price.

Tightly regulated.

Uncompetitive- price greater than perceived value.