Strategic positioning turns what a firm has learned about its competitive environment into choices about how it will serve customers and compete. This lesson explains how managers combine external and internal analysis to make those choices.
Strategic analysis helps managers understand the conditions in which a firm operates. It considers the firm’s internal environment—its resources and capabilities—as well as its external environment, including its industry and the broader macro environment. Analysis provides a basis for decisions; it does not make those decisions for managers.
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What is strategic positioning?
A firm’s decisions about how it will serve customers and compete against rivals, based on its capabilities and competitive environment.
What internal factors inform a firm’s strategic position?
The firm’s resources and capabilities help managers judge what the firm can do and which competitive choices are feasible.
What customer-related choices are part of a strategic position?
The firm decides which customers to serve and what those customers value and are willing to pay for.
What is a generic competitive strategy?
A broad competitive approach chosen in light of the firm’s capabilities and the positions already taken by industry rivals.
Why does a firm choose geographic markets?
Geographic choices determine where the firm operates, which customers it can reach, and which competitive conditions it encounters.
Quiz questions
When does a firm have a competitive advantage?Answer: When it attracts more customers or earns more profit than rivals.
Why should a firm seek a position that rivals cannot imitate quickly or easily?Answer: Easy imitation can make the firm’s distinction harder to preserve.
A neighborhood’s customer demographics and a nearby potential rival are being assessed by a fitness studio. How should these factors be classified?Answer: They are external conditions in the studio’s competitive environment.
Why is a promising market opportunity not automatically a competitive advantage?Answer: The firm must be able to turn it into customer value through suitable activities.
What should managers assess when deciding whether a proposed position creates a valued difference?Answer: Whether the firm can organize activities to deliver value better than rivals.
Based on Principles of Management by David S. Bright, Anastasia H. Cortes, Eva Hartmann, K. Praveen Parboteeah, Jon L. Pierce, Monique Reece, Amit Shah, Siri Terjesen, Joseph Weiss, Margaret A. White, Donald G. Gardner, Jason Lambert et al. (OpenStax), licensed CC BY 4.0. Adapted into a summary, flashcards and quizzes.