Competitive positioning is all about setting yourself up as an authority or expert in your field and making your presence felt. It is about carving out a unique position in the competitive marketplace and working your product/service/business to deliver on this strategy. The best competitive positioning strategies will give you the ability to set your business or product apart from the rest of your competition, while also providing a clear path for accomplishing this positioning. Below are some key areas that you need to take into consideration as you develop your competitive positioning strategy:
Create a competitive positioning statement – This document should be a comprehensive overview of what your firm does, who it serves, the products and services it provides, and your overall business philosophy. Make sure that you discuss all of these items in a way that makes clear to your readers exactly what your firm offers. You can do this by reviewing the sections of the business plan or the executive summary for each quarter since it will provide specific information about the activities that you will engage in during the quarter and the progress of the firm during that quarter. You should also conduct a thorough analysis of the current competitive environment and discuss how you believe your firm will fare against competitors in this environment. Competitive positioning should be a holistic way of looking at your firm’s strengths and weaknesses so that you make strategic decisions that maximize your firm’s strengths and minimize its weaknesses.
Create a competitive positioning strategy – Once you have created your positioning statement, conduct an analysis of the various aspects of your business and identify those areas that require the most attention. Focus primarily on what those areas are and how they directly affect your customers, your revenue, and your bottom line. Also take into consideration any additional strategies that you would like to implement to better serve your customers. Competitive positioning won’t just be a list of bullet points; it will be a map or system that is easy to follow. So don’t skimp on the details when you’re creating your strategy.
Define your competitive positioning framework – The first step in developing a competitive positioning framework is defining your overall company, as well as each department’s place in the overall picture. Next you will want to identify which types of activities and products will help you gain market share and achieve your business objectives. Competitive positioning will also include a listing of the competitive strengths of your firm relative to your competitors. Finally, you’ll want to identify the key features of your business that differentiate it from your competitors.
Create a value proposition – Your value proposition is a description of your firm’s unique competitive positioning, goals, and management strategy relative to other similar firms within your industry. It is absolutely critical that you define the key characteristics of your firm in a clear and compelling manner. As you fine-tune your overall strategy, identify your target market, and determine your strategy for execution, your value proposition will guide you toward the appropriate actions to take. To better illustrate, if you are a small manufacturing firm, your value proposition might focus on creating custom-designed clothing that is unique and has low costs. However, if you’re a large apparel manufacturer with an array of product lines, your value proposition might be more centered on building long-term sustainability and market share through strategic alliances and acquisitions.
Emotional Decision Criteria – Many firms fail to effectively define their competitive positioning because they allow emotions to control the process. For example, many companies that lack a strong competitive positioning strategy to develop a “quick fix” or a “quick route” to success. They create one product and focus on the revenue gained from that product rather than the possibility of multiple streams of revenue derived from different products. This approach not only damages their future prospects, but also shortens the time period necessary to achieve sustainable growth. When identifying which competitive strategies to employ, keep in mind what strategies to build customer intimacy and are grounded in core values.