WHAT IS STRATEGIC POSITIONING
Strategic positioning refers to a company’s position in its reference environment with respect to the various sectors/businesses/products in which it operates or wishes to operate, taking into account external attractiveness and competitive capabilities.
Carrying out strategic positioning analysis is fundamental to the formulation of the strategy that a given company decides to implement, as it allows the current and desired future situation to be detected.
In order to determine the strategic positioning, it is necessary to start with the analysis of the corporate strategy, this being the concluding moment.
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The McKinsey matrix
The McKinsey matrix is a model that enables an analysis of individual strategic business units for the enterprise and can be used to support strategic analysis in four fields of application:
- resource allocation: the attractiveness of a strategic business area is examined in relation to the attractiveness of the sector and competitive positioning;
- business strategy formulation: it indicates the strategic approach to be followed with respect to investment opportunities, suggesting possible repositioning of the business;
- portfolio balance sheet analysis: balancing is about cash flow and growth;
- definition of performance targets: positioning determines profit potential.
The two axes of the matrix are the level of attractiveness of the sector and the competitive position of the individual business unit of the company.
The advantages of the McKinsey matrix
- It allows a balanced portfolio to be identified;
- defines investment priorities for the company’s various businesses;
- provides logical and rational directions for the development of the individual business units, in line with the position in both internal and external dimensions;
- allows an analysis of both the current situation and the future situation;
- guides the process of allocating resources between the various businesses.
The disadvantages of the model
- Excessively difficult to use;
- indeterminacy and subjectivity;
- aggregation of factors;
- provides general guidance and food for thought;
- subjective and random judgements in the placement of products within the matrix.
Competitive positioning is the process by which one identifies the position that a particular product/service occupies in the mind of the consumer compared to all competing products.
This process starts with the identification of the factors that were taken into account by consumers in a given segment at the purchasing stage (relevant purchasing factors), develops with the detection of the judgments that consumers make about competing products, makes it possible to analyze the position that products occupy in the consumer’s mind, and identifies the ways in which it is possible to distinguish oneself from competitors and gain a competitive advantage.
The objective is to give the product its own personality so that it can be positioned distinctively from the competition. The distinctiveness of a product or service vis-à-vis that of competitors is determined by giving prominence to specific features over others.
This represents a crucial strategic choice since it is on the basis of the identification of these characteristics that consumers will make their purchasing decisions. In addition, all the factors of the marketing mix (product, price, point of sale, and communication) can influence the competitive positioning of a product or service, so a clear definition of the positioning strategy is required to ensure that the activities of the marketing plan are consistent with each other and provide support.
The moments of the competitive positioning process
- The first moment is one of analysis and is part of analytical marketing and aims to identify market trends in terms of supply and demand by specifying which factors are relevant to the products being considered;
- The second moment, which is part of strategic marketing and involves strategic planning and subsequent control, defines which marketing factors to use in order to achieve the desired positioning and the control procedures to be put in place in order to achieve the desired objective.
The seven stages of competitive positioning
This process can be broken down into seven stages, the first five falling within the first moment and the remaining two within the second:
- identification of the needs sought and the lifestyle for each segment;
- specification of factors evoked in the purchase decision;
- definition of products that the consumer simultaneously considers when purchasing;
- analysis of the relevant factors identified relating to the products under consideration;
- graphical representation of the competitive positioning of different products;
- identification of the ideal positioning and subsequent formulation of the desired positioning;
- control of the position actually acquired on the market.
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