Porter's Strategic Positioning Alternatives

 

Serving few needs of many

How many of us change our oil ourselves these days?  And  how many of us use an Oil Can Henry's or quick lube outlet vs. having it done by our dealership or mechanic?  This is a perfect example of a position in which a narrow set of needs are served for many customers or markets.

In a sense, Internet retailers have been explosive with this concept.  The specialization that we have seen emerge in just the last five years is mind-boggling.  Try buying a HDMI cable for your television or an ink cartridge for your printer on-line. Narrow focus on needs and broad audience.  Though, to be clear, the Internet is a route to the market and not a base strategy or position.  It simply provides accessibility.

Serving the broad needs of a few

IKEA for example, serves the broad home furnishing needs of a highly targeted demographic.  IKEA was there for many of us when we moved up from dorm furniture to our first apartment post graduation.  This comes close to the traditional thinking of targeting a specific segment of customers and becoming intimately aware of their specific needs.  Southwest also chose to provide a unique set of activities to support their position and has been very effective in performing them differently than their competition.

Serving the broad needs of many in a narrow market

This position assumes the needs of the target customer are similar to those of other customers but the set of activities to reach them is different.  This positioning is least understood among the three types of positioning.  Some good examples might be a retail strategy of targeting rural instead of urban-based customers , small customers vs. large or densely rather than sparsely situated customers. 

Having stated the above, positioning requires a solid analytical framework of thinking as well as a healthy dose of creative, intuitive reasoning.  It requires a clear understanding of the current position of your company as well as key competitors and the ability to construct new positions or even new "markets" that can change the playing field entirely. (See Red Ocean-Blue Ocean thinking--Kim and Mauborgne)  We might also bear in mind that new positions can emerge continuously as the markets change and competition is dynamic.  New entrants of course, always play a part in the equation. 

Establishing a clear positioning strategy drives all subsequent activity and execution and ultimately the foundation for success of the enterprise.  There is no substitute for a full and complete process of arriving at a position that affords your company the best opportunity for success.