Lecture 4; Positioning school Flashcards
What is positioning? (and in strategy)
Positioning is a relative place, situation or standing.
In strategy positioning is a relative standing in the economic marketplace vis a vis other actors/competitors.
What is the origin of the positioning school?
- The military.
delineation of types of strategies and matching those to the most suitable conditions resulting in maxims general rules of conduct,
Influenced by the art of war - Sun Tzu - The environment
you need to look at your environment = competitors
3, Strategy Boutiques
- Causal effects
What are the maxims general rules of conduct
Surround enemy = invade their market space
- Attack enemy = price wars = supermarkets, a direct attack on the competitor
- Divide enemy = manipulate suppliers
- Engage enemy = alliances (coca cola en pepsi)
- Be capable to withdraw = Option to exit
What is added to the positioning school compared to the design and planning school?
- Emphasizing on the importance of the strategy itself rather than the process. The strategy equals positions
- Opened the prescriptive side to substantial investigation
What are the premises of the positioning school?
- Strategy making is a controlled, consious process
- Strategies are genericm identifiable positions in the marketplace
- The environment is economic and competitive
- The formation is based on analytical calculation
- Analysts play a major role in the process
- Strategies are full blown deliberate formalized and afterwards implemented
- CEO is in charge when deciding which strategy to follow; analysts are main characters
What is the process of the positioning school?
Industry structure -> strategic position -> organizational structure
The marketplace must be understood before taking position in the market space
What are Porter’s 5 forces?
- Threat of new entrants
- Bargaining power of supplierd
- Bargaining power of customers
- Threat of substitutes
- Intesity of rivalry
What are the 2 basic types of competitive advantage according to Porter?
1) Low cost
2) Differentiation
What are the 4 generic strategies according to Porter?
1) Cost leadership -> being the low-cost producer in industry (economies of scale)
2) Differentiation -> Development of unique products/services
3) Cost focus -> narrow market segment where firm sells at low cost
4) Differentiation focus
Focus on narrow market segments with differentiated costs
What is Porter’s value chain?
the value chain gives a systematic way to examine all activities a firm perfroms and how they interact with each other.
There is a difference between;
1. Primary activities
2. Support actibities
What are the 4 kinds of positioning school research?
- Single static (Particular generic strategies)
- Cluster static (individual strategic positions and weaving them into integrated strategies)
- Single dynamic (The effect of a single change)
- Cluster dynamic (clusters of relationships in a dynamic setting)
What is criticism on the positioning school?
- Seperates thinking from acting
- Excessive focus on competition
- Bias towards the big and established
- Reinforces existing categories
- Economies over polictics
- Concerns about focus
- Concerns about context
- Concerns abour process
- Concerns about strategies
Contributions of the positioning school
the role of this school is to support the strategic process with calculations and analysis.
co-opetitition –> cooperative interaction with competitors, that would give them more strength
Tools
What is the key point of the positioning school?
Only certain strategies (positions) are desirable in any given industry. these strategies can be defended against comeptition
What is game theory?
Matches the positioning school;
- Useful to examine competition and cooperation within small groups of firms
- Modelling what rational, self-interested actors likely to do in well-defined situations