This document discusses the importance of strategic differentiation for industry leaders. It argues that differentiation needs to be an integral part of any business strategy today. Industry leaders like Volvo have built their positions around clear strategic differentiators like safety. The document advocates managing strategic differentiation across the entire value chain rather than just within the organization, in order to guide decisions, increase marketing effectiveness, influence future trends, and integrate acquisitions.

1. Building strategic differentiation:
The top priority of industry leaders
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2. Differentiation was once a choice of strategy,
today it needs to be part of any strategy

3. Differentiation guides decisions
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4. Volvo owns ”safety,”
BMW owns ”the experience”
Positioning Operational
statement evidence
Leadership in:
For life.  Safety systems innovation
 Superior crash test performance
Leadership in:
The ultimate
driving machine.  Combining performance, style
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and luxury
 Superior engineering
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5. UPM owns ”continuous improvement,”
StoraEnso owns ”innovation”
Positioning Operational
statement evidence
Leadership in:
We lead.  Customer relationship management
We learn.  Quality improvement programs
 Wood tracking and certification
Leadership in:
What paper  Product range
can do.
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 R&D pushing the boundaries of paper
 Promoting new applications
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6. Industry leaders add strategic differentiation to
traditional business strategy
Traditional business strategy Strategic differentiation
Targeting a desired industry ranking + Targeting a desired reputation
Optimizing a portfolio of businesses + Optimizing a portfolio of brands
Aligning organization with strategy + Aligning culture with desired reputation
Marketing drives sales + Marketing also drives positioning
Tracking financial performance + Tracking positioning performance
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= Industry leadership
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7. Traditional strategy is developed and managed
through the organization
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Traditional strategy
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8. ”Strategic differentiation” is developed and
managed across the value chain
Investors Suppliers Company Distributors Dealers/ End-users Influencers
retailers
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Strategic differentiation
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9. This requires changing management priorities,
not organizational structure
Traditional business strategy Strategic differentiation
+ Investors Suppliers Company Distributors Dealers/
retailers
End-users Influencers
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Developed and managed Developed and managed
through the organization through the value chain
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10. Manage your value chain, not just your company
Investors Suppliers Company Distributors Dealers/ End-users Influencers
retailers
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11. Each interaction across your value chain is
influenced in four ways
Emotional
Internal External
Investors Suppliers Company Distributors Dealers/ End-users Influencers
Rational retailers
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12. Your positioning strategy guides decisions
Emotional
Optimized Brand
Emotional
Portfolio
Positioning Strategy
External
Internal
Cultural Aligned
Internal
Uniqueness
(True, relevant, high- External
Marketing
value focus)
Operational
Rational
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Evidence
Rational
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13. Use positioning to increase marketing
effectiveness, driving volume and pricing
Drive volume &
pricing
Push Pull
Investors Suppliers Company Distributors Dealers/ End-users Influencers
retailers
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14. Use positioning to guide branding and
communications, influencing future trends
Drive volume & Influence
pricing future trends
Push Pull Pull
Investors Suppliers Company Distributors Dealers/ End-users Influencers
retailers
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15. Use positioning to guide innovation by
development teams and partners
Guide Drive volume & Influence
innovation pricing future trends
Push Push Pull Pull
Investors Suppliers Company Distributors Dealers/ End-users Influencers
retailers
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16. Use positioning to integrate past and future
acquisitions
Guide Drive volume & Influence
innovation pricing future trends
Push Push Pull Pull
Investors Suppliers Company Distributors Dealers/ End-users Influencers
retailers
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Integrate acquisitions
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17. Volvo uses positioning to manage their value
chain, not just their company
Guide safety Drive volume & Influence future
innovation pricing of safety safety trends
Push Push Pull Pull
Investors Suppliers Distributors Dealers End-users Influencers
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Volvo is systematically building strategic differentiation
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18. Volvo’s Quadric
Volvo S40 Volvo V50 Volvo XC70
Volvo S60 Volvo V70 Volvo XC90
Volvo S80 Volvo C70
Corporate values
Quality, Safety and
Environmental Care
Safety
"An automobile is driven by
people. Safety is and must
(life)
be the basic principle in all
design work.“
– Volvo founders, 1939
“Whether you’re starting a
family or creating one as
Leading the industry in safety innovation you go.”
First three-point seat belt First wide-angle mirror
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First rear-facing child safety seat First centre seat belt
First three-point seat belts in rear seat First side impact protection system (25%
First inertia reel seat belts reduction in fatalities)
First seat belt reminder First airbags for trucks
First bulb failure warning sensor First side protection airbag (SIPS bag)
First child booster cushion (another 25% reduction in fatalities)

19. Industry leaders could make many claims, but
choose to build focused positions
Product Service Innovation
Position
leadership? leadership? leadership?
Yes Yes Yes Safety
Yes Yes Yes Reliability
Yes Yes Yes Simplicity
Yes Yes Yes Problem solving
Yes Yes Yes Driving change
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Yes Yes Yes Performance
Empowering
Yes Yes Yes
people
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20. www.quadric.dk
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