Strategic Positioning in Markets
EZB Consulting will review and create the Strategic Positioning of your company. Whether you use the cost strategy or the differentiation strategy we provide you with extensive advice to maximize profits and create a lasting competitive advantage utilizing strategic positioning.
Your firm’s strategic positioning strategy should be consistent and strongly linked to your firm’s resources. We will help you create a strategy to build upon your strategic positioning in a way that generates the most possible value for your firm. The resources developed must be rare and valuable, and not easily imitative, or the firm’s position may easily be attacked by rivals. It’s important for a firm to select and establish strategic positioning.
The goal of the cost strategy is to achieve cost leadership in a particular industry. Successfully implementing this strategy requires cost control, overhead control, efficiencies of scale in production, and minimization of costs associated with advertising, service, sales, research and development. A great deal of managerial attention to these details is required to achieve cost leadership.
One way in which firms can earn higher profits is by offering products that are different from those that their rivals are offering. There are a variety of ways in which firms can choose to offer a different style of product. One way is vertical differentiation. The idea behind vertical differentiation is that some firms can compete solely on quality. That is, a vertically differentiated market is one in which everybody agrees that some products are better than other products, yet not everybody buys the same products.
Horizontal Differentiation Strategy
Firms are able to differentiate along two dimensions: vertical and horizontal. Horizontal differentiation occurs when there are different products but consumers disagree on which is the best product. In choosing a horizontal differentiation strategy, the firm defines and serves a niche. This topic introduces horizontal differentiation and provides several examples of firms that use this strategy. In addition, it identifies some risks and benefits of using this strategy.