Strategic Positioning and Levels

What is an Effective Strategy?

• $strategic positioning:$ attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company
  • developed by Michael Porter
  • performing different activities from rivals, or performing similar activities in different ways

Strategic Positioning and Its Principles

• 3 key principles underlie strategic positioning:

1. strategy is the creation of a unique and valuable position

      1. strategic positioning merges from 3 sources:

         1. few needs, many customers 2. broad needs, few customers 3. broad needs, many customers

2. strategy requires trade-offs in competing

      1. companies have to choose not only which strategy to follow, but also which strategy not to follow

3. strategy involves creating a “fit” among activities

      1. how do a company’s activities interact and reinforce one another?

Levels of Strategy

• corporate-level strategy:
  • focuses on organization as a whole
  • executive generally referred to as the “C-suite”
  • includes the coporation
• business-level strategy:
  • focuses on individual business units or product/service lines
  • managers at this level focus on issues aimed at implementing decisions under consideration from corporate-level
  • includes electronic components unit, services unit, and the retail unit
• functional level strategy:
  • applies to the key functional departments or units within the business units
  • functional managers focus more on tactical issues
  • includes finance, human resources, operations, and marketing and communications

Competitive Intelligence

• $competitive intelligence:$ gaining information about competitors’ activities so that you can anticipate their moves and react appropriately
  • sources of information include: public print and advertising, investor information, and informal sources