Marketing Strategy and Competitive Positioning pdf ebook

CHAPTER 2 STRATEGIC MARKETING PLANNING
They may be viewed as the ground stakes in the strategic game, essential to reserve a seat 
at the competitive table. 
Earlier we said that it ‘appears’ a choice exists between the options, and this is true 
to a large extent. But it is useful for us to reflect on what choosing between the options 
outlined implies for the strategic direction of a business, and in ‘the real world’ it is likely 
that more than one of these options is desirable for the senior management team, who are 
often under pressure to increase sales and improve productivity. The specific nuances of a 
particular company strategy (and associated organisational politics) are somewhat beyond 
the bounds of this text; however, it is worth noting that initiatives to improve productiv-
ity in one part of the organisation may not act in isolation from a ‘sales drive’ in another 
part. This said, what is clear is that the overarching notion of strategic focus (and choosing 
one option) is still very much relevant and important for organisations wishing to improve 
market position.
2.4 
Creation of the competitive positioning 
The competitive positioning of the company is a statement of market targets ( where the 
company will compete) and differential advantage ( how the company will compete). The 
positioning is developed to achieve the objectives laid down under the core strategy. For a 
company whose objective is to gain market share, and the broad approach to that is to win 
competitors’ customers, for example, the competitive positioning will be a statement of 
exactly how and where in the market that will be achieved. 
2.4.1 Market targets 
While the discussion of core strategy required an analysis of customers and competitors 
to identify potential opportunities and threats, competitive positioning selects those tar-
gets most suited to utilising the company’s strengths and minimising vulnerability due to 
weaknesses. 
A number of factors should be considered in choosing a market target. Broadly, they fall 
into two categories: assessing market attractiveness and evaluating the company’s current 
or potential strengths in serving that market (see Porter, 1987 ). 
Market attractiveness consists of many (possibly conflicting) factors, and it is important 
that a sensible, rounded and structured review is undertaken. Other things being equal, 
however, a market will generally be more attractive if the following hold: 
It is large.
It is growing.
Contribution margins are high.
Competitive intensity and rivalry are low (and the current incumbents do not provide high 
levels of satisfaction).
There are high entry and low exit barriers.
The market is not vulnerable to uncontrollable events.
Markets that possess all these features do not exist for long, if at all. They are, almost 
by definition, bound to attract high levels of competition and hence become less attractive 
to other entrants over time. For small or medium-sized companies, small and/or static mar-
kets that do not attract more powerful competitors may be more appealing. In a market 
where high entry barriers (such as proprietary technology, high switching costs, etc.) can 
be erected, the company will be better able to defend its position against competitive attack 
(see Chapter 10 ). 

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CREATION OF THE COMPETITIVE POSITIONING
To a greater or lesser extent, all markets are vulnerable to external and uncontrollable 
factors such as general economic conditions, government legislation or political change. 
However, some markets are more vulnerable, and this is especially true when selecting 
among international market alternatives. In the UK, companies can seek help and advice 
from the government in the form of the Department for International Trade (see www.gov.