Monday, November 30, 2009

Bowman's Strategy Clock

The Strategy Clock: Bowman's Competitive Strategy Options

The 'Strategy Clock' is based upon the work of Cliff Bowman (see C. Bowman and D. Faulkner 'Competitve and Corporate Strategy - Irwin - 1996). It's another suitable way to analyze a company's competitive position in comparison to the offerings of competitors. As with Porter's Generic Strategies, Bowman considers competitive advantage in relation to cost advantage or differentiation advantage. There are six core strategic options:

Option one - low price/low added value.

  • likely to be segment specific.

Option two - low price.

  • risk of price war and low margins/need to be a 'cost leader'.

Option three - Hybrid.

  • low cost base and reinvestment in low price and differentiation.

Option four - Differentiation.

(a)without a price premium:

  • perceived added value by user, yielding market share benefits.

(b)with a price premium:

  • perceived added value sufficient to to bear price premium.

Option five - focussed differentiation.

  • perceived added value to a 'particular segment' warranting a premium price.

Option six - increased price/standard.

  • higher margins if competitors do not value follow/risk of losing market share.

Option seven - increased price/low values.

  • only feasible in a monopoly situation.

Option eight - low value/standard price.

  • loss of market share.

This was one of the best additions i made for and it very much relates to competitive strategy development and therefore has much significance in effective marketing.