Value vs. Price - Strategy theory
Academic textbooks commonly propose three “generic” strategies in the market:
cost leadership, differentiation, or focus.
Porter, M (1985) Competitive Advantage: Creating and Sustaining Superior Performance, The Free
Press.
Generic Strategies
(Adapted from M E Porter, Competitive Advantage, Free Press, 1985)
Competitive Advantage
Low Cost
Differentiation
Broad
Low Cost Leader
Differentiation
Competitive
Scope
Narrow
Low cost focus
Differentiation focus
A more recent framework is the Strategy Clock, adapted from the work of Cliff
Bowman. Note that Bowman recognizes a “Hybrid” strategy, whereas Porter
advises “do not get stuck in the middle”.
Faulkner, D & Bowman C, (1995) The Essence of Competitive Strategy, Prentice Hall
Johnson G & Scholes K, (2002) Exploring Corporate Strategy, Pearson Education Ltd
Questions:
1.) Where would you map or place your own enterprise in the value-price map below?
2.) Where would you map your key competitors?
3.) Do you have a simple, pure value-price offer for customers?
4.) Or do you offer product ranges that apply to different customer audiences?
Tasks:
1.) Apply the Strategy Clock map to the UK supermarkets
2.) Apply the Strategy Clock map to the UK clothing retailers
3.) What is the key difference between these sectors? Think about the viability, or not, of a mid-
market (hybrid) position.
