Strategic Positioning

Strategic Position Analysis

Wondering how to analyze a company's strategic position? Here are a few tips to help you perform a strategic position analysis and identify which strategic position makes sense going forward.

Strategic positioning is similar to a high stakes chess game.

The companies that dominate the marketplace are usually the ones that have planned to position themselves as a leader in a specific market segment or have risen to the fore by dominating a targeted value proposition.

Consider the coffee war that erupted between Starbucks and Dunkin' Donuts. Several years ago, Starbucks positioned itself as a provider of high-end café beverages. Their strategic position wasn't based on price, but on the quality of their products and the experience itself. In response, Dunkin' Donuts staked out their own strategic position based on price, targeting a different market segment with a different value proposition.

A down economy and other factors ultimately forced Starbucks to reposition their brand to compete with Dunkin' Donuts and other lower cost coffee providers. However, that wouldn't have happened without strategic position analysis. At some point, Starbucks analyzed and adjusted their strategic position to remain competitive.

Strategic position analysis is vital for companies that are serious about remaining relevant with consumers. The methods for performing a strategic assessment vary, but there are several areas that any strategic position audit simply can't ignore.

  • Product performance. Product performance is a leading consideration in strategic positioning assessment. If your products are performing in a manner that is consistent with your strategic positioning, then you've done your job. But if your products are underperforming in your positioning category (e.g. price), then something is out of kilter and further analysis is required.
  • Core competencies. Is your strategic position consistent with your company's core competencies? If your competencies have shifted, it's possible that your desired strategic position has become incompatible with your business model and needs to be refocused to leverage the organization's business strengths.
  • Resource allocation. Strategic analysis must address the company's current resource allocation. It's particularly important to make sure your business's resources (people, equipment, supply channels, etc.) are capable of maintaining the position once you've secured it.
  • Competitive & market pressures. External factors also play an important role in strategic position analysis. Competitive positioning and changing market conditions can dramatically affect the outcomes of your brand's strategic positioning efforts, even if your strategic position is already entrenched in the consumer consciousness.

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