BOWMAN’S STRATEGIC CLOCK - POSITIONS ONE TO FIVE Flashcards
How did Bowman build his strategy
Boman built on Portors work - and he didn’t necessarily agree with everything porter said the main difference came about the strategies Porter said the stuck in the middle strategy, which porter said was not a recipe for a successful business, where a Bowman has slightly altered the model and says that you can operate in a position that porter said couldn’t and be successful with that.
What positions are not possible in the long run unless certain conditions are met
Position 6, 7 & 8 are not possible in the long run unless certain conditions are met.
Which positions are viable strategis for busineses to folow in the long run
1, 2, 3, 4 & 5
What is position 1
Low Price/ Low Value
Examples: Poundland, Aldi, Charity shops
Organisations selling income elastic inferior goods
Target low price customers - similar to cost focus
Be successful during a recession, but may lose sales in a recovery/ boom
Importance of economies of scale - They need to use there purchasing power to negotiating lower costs with suppliers
What is position 2
Low Price
Examples: ASDA, Primark, Wimpey’s (Compete in a mass market, but be a cost leader in that market)
Comparable to Porter’s cost leadership strategy
Targeting mass market with USP of price
Can be a successful strategy in the long - run, but relies on large sales volume
Crucial to exploit economies of scale
What is position 3
Hybrid (selling high value products for cheap)
Position Three - Hybrid
Examples: VW (lower than BMW, and provide high value), Next, Sainsbury’s
Comparable to porters stuck in the middle
Targeting aspirational customers who want quality, buy are also price conscious
Relies on developing image of quality and value
Can be difficult to combine differentiation and low price
What are Porter’s and and Bowmen’s views on position 3
Porter said that that may confuse customers (as you’re telling them you are selling a high value product for a low/ reasonable price) and Porter said it wouldn’t be viable in the long run.
But bowmen said that there’s plenty of evidence that shows this strategy works in practice
What is position 4
Differentiation
Examples: Nike, Apple, BMW
Comparable to Porter’s differentiation leadership
Targeting aspirational customers who want quality, and are willing to pay a premium price
High profit margins possible on large numbers of sales
Incurs high costs in terms of R&D, market research and promotions
What is position 5
Focused Differentiation
Examples: Hugo boss, Harrods, JAguar
Targeting small groups of customers willing to pay premium prices for a highly differentiated good
High profit margins possible due to high levels of customers satisfaction
Incurs high costs in terms of R&D, market research and promotion
Products likely to be highly income elastic - goods in a boom
