MEANING OF STRATEGIC POSITIONING

Ø  STRATEGIC POSITIONING
ACCOUNTING FOR MANAGERIAL DECISIONS

Ø  MEANING OF STRATEGIC POSITIONING

•     STRATEGIC POSITIONING IS THE POSITIONING OF AN ORGANIZATION IN THE FUTURE  WHILE TAKING INTO ACCOUNT THE CHANGING ENVIRONMENT PLUS SYSTEMATIC REALIZATION OF THE POSITIONING.

•     IT IS CONCERNED WITH THE WAY IN WHICH A BUSINESS AS A WHOLE DISTINGUISHES ITSELF IN A VALUABLE WAY FROM ITS COMPETITORS AND DELIVERS VALUE TO SPECIFIC CUSTOMER SEGMENTS`.

•     AN ATTEMPT TO ACHIEVE SUSTAINABLE COMPETITIVE ADVANTAGE BY PRESERVING WHAT IS DISTINCTIVE ABOUT A COMPANY. IT MEANS PERFORMING DIFFERENT ACTIVITIES FROM RIVALS OR PERFORMING SIMILAR ACTIVITIES IN DIFFERENT WAYS.

•    THREE KEY PRINCIPLES:-

1.     STRATEGY IS THE CREATION OF A UNIQUE AND VARIABLE POSITION INVOLVING A DIFFERENT SET OF ACTIVITIES

2.     STRATEGIES REQUIRES YOU TO MAKE TRADE-OFF IN COMPETING TO CHOOSE WHAT NOT TO DO

3.     STRATEGY INVOLVES CREATING FIT AMONG A COMPANY’S ACTIVITIES.

•     SIX PRINCIPLES OF STRATEGIC POSITIONING GIVEN M PORTER

1.     RIGHT GOAL : SUPERIOR LONG TERM RETURN ON INVESTMENT.ONLY BY GROUNDING STRATEGY IN SUSTAINED PROFITABILITY WILL RESULT IN GENERATION OF ECONOMIC VALUE

2.     VALUE PROPOSITION:_A SET OF BENEFITS,DIFFERENT FROM THOSE OF COMPETITORS. IT DEFINE A WAY OF COMPETING THAT DELIVERS UNIQUE VALUE IN PARTICULAR SET OF USES OR FOR A PARTICULAR SET OF CUSTOMERS

3.     DISTINCTIVE  VALUE CHAIN:A COMPANY MUST PLAN A WAY IT CONDUCTS MANUFACTURING,LOGISTICS,SERVICE,DELIVERY,MARKETING,HUMAN RESOURCE MGMT AND SO ON DIFFERENTLY FROM RIVALS AND TAILORED TO ITS UNIQUE VALUE PROPOSITION.

4.     A COMPANY MUST  ADOPT ROBUST STRATEGIES INVOLVING TRADE OFF FORGO SOME PRODUCT FEATURES,SERVICES OR ACTIVITIES IN ORDER TO DIFFERENT FROM ITS COMPETITOR

5.     STRATEGY DEFINES HOW ALL THE ELEMENTS OF WHAT COMPANY DOES FIT. A STRATEGY INVOLVE MAKING CHOICES THROUGHOUT THE VALUE CHAIN THAT ARE INTERDEPENDENT

6.      FINALLY A STRATEGY INVOLVES CONTINUITY OF DIRECTIONS COMPANY MUST DEFINE DISTINCTIVE VALUE PROPOSITION THAT IT WILL STAND FOREVER

 EVEN IF THAT MEANS SACRIFICING CERTAIN OPPORTUNITIES.

Ø  STRATEGIC POSITIONING ANALYSIS

•     MICHEAL PORTER SUGGESTED TWO WAYS FOR ADOPTING COMPETITIVE STRATEGY:

1.     A COMPANY CAN COMPETE WITH LOW COSTS: MINIMIZING COST TO CREATE COMPETITIVE ADVANTAGE

2.     OR BY OFFERING SUPERIOR PRODUCT BY ADOPTING DIFFERENTIATION STRATEGY.

•     THERE ARE  TWO STEPS IN STRATEGIC COST MGMT:

I.        TO IDENTIFY USING PORTER’S FRAMEWORK WHAT MANAGERS MUST DO TO MAKE THE FIRM SUCCESSFUL

II.        TO DEVELOP COST MGMT METHODS AND PRACTICES TO FACILITATE MGMT EFFORTS