Blog 33: Tell why your product is unique (strategic positioning) compared to why it is better

Pick any sector, more often than not, there is stiff competition. So how does a new product make inroads?

The answer: Strategic positioning.

It’s not often obvious! But strategic positioning is a way to attract customers away from established players OR bring in new customers into the market.

• Strategic positioning helps new players triumph. They discover unique positions that have been available but simply overlooked by established players.

• Ikea for example, recognized a customer group (i.e. customers who are happy to trade-off service for cost) that had been ignored.

Operational effectiveness is NOT a strategy.

• Operational effectiveness means performing activities (such as producing, selling and delivering) better – with fewer defects than the competition.

• Japanese firms reaped benefits of operational effectiveness in the 1970s and 1980s.

• Operational effectiveness is definitely a great practice that firms should strive for …

• … however, the more benchmarking firms do – the more similar they become. WHEREAS, strategic positioning preserves the company’s uniqueness.

Three principles of strategic positioning:

1. Strategic positioning arise from 3 scenarios:

   - Serving few needs of many customers. (e.g, Evian sells only water)

   - Serving broad needs of few customers. (e.g., consumer luxury brand serving HNIs)

   - Serving broad needs of many customers in a narrow market. (for example, a retail store operating only in small towns)

2. Strategic positioning requires you to choose what not to do. That is, make trade-offs.

3. Strategic positioning involves creating a ‘fit’ among the company’s activities.

   - ‘Fit’ refers to ways a company’s activities interact and reinforce one another. When a company’s activities reinforce each other, competitors cannot easily imitate them. ‘Fit’ drives both competitive advantage and sustainability.

Jump to blog 100 to refer to the overall product management mind map.

Source: Book - HBR’s 10 Must Reads on strategy

All the best! 😊