Strategic Positioning and Performance Measurement

John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
Strategic positioning and its
implications for performance
measurement
John Devlin, MBA, FCCA
https://au.linkedin.com/in/JohnDevlinSydney

Content
Why do we need a position?
Topic
1
Strategic Positioning &
Segmentation
2
Core competencies & value
proposition
3
How we measure what
matters?
4
Discussion5

Why do we need a position?
Pre WWII
Production Orientation
Focus on efficiency in
producing standard product.
We make the product
according to our specification
1940’s -1970’s
Selling Orientation
Post 70’s
Market Orientation
Focus on selling our
product.
Selling the brand
If people know about our
product they will buy it
If we find out what
customers want & then
make it, then market it to
customers, they may buy it
if it suits their needs at a
particular time
Source: P Kotler, Marketing Management, 7th Ed
Can we produce the product?
Can we produce enough of it?
Can we sell the product?
Can we charge enough for it?
What do customers want?
Can we develop it while they still want it?
How can we keep our customers happy?

Strategic positioning is about
answering some key questions
KeyQuestionstoAnswer
Who are we serving?
What do we want to be?
What is our value proposition?
Requires a basis of segmentation.
We can’t be everything to everybody
What do we have to invest in/
improve to satisfy our key markets
How will we meet our chosen
segments needs?

Demographic
Industry
Size
Needs based
approach
Attribute based
approach
Segmentation should give us insight
as to how we can serve our clients
Segmentation
Reactive basis of
segmenting market
Proactive approach
What is the driver
of value that a
customer requires
to be met

Each Strategic Position requires a different
set of organisational capabilities
Value Provided
(Position)
Market
Deliverable 1
Market
Deliverable 2
Market
Deliverable 3
Specific
Deliverable 1
Specific
Deliverable 2
Specific
Deliverable 3
Specific
Deliverable 4
Specific
Deliverable 6
Specific
Deliverable 5
Resource or Capability 1

Each Strategic Position requires a different
set of organisational capabilities
Value Provided
(Position)
Market
Deliverable 1
Market
Deliverable 2
Market
Deliverable 3
Specific
Deliverable 1
Specific
Deliverable 2
Specific
Deliverable 3
Specific
Deliverable 4
Specific
Deliverable 6
Specific
Deliverable 5
Segment 1

Each Segment requires a different value
proposition which must resonate with their needs
Segmentation, comined with an audit of core competencies, generates options for
potential target markets to serve.
A value proposition is generally built around excellence in one of three dimensions
Operational Excellence
•Price
•Selection
•Convenience
•Zero Defects
Product Leadership
•High performance product
•Entering new market spaces
•Product Introductions
•Service Introductions
Customer Intimacy
•Customer knowledge
•Solutions offered
•Share of wallet
•Retention
It also provides the basis around which a value proposition should be built

Segment will determine “excellence”
dimension on which we will compete
Operational
Excellence
Customer Intimacy
Product Leadership
• What is it that clients want?
• How do we deliver this in a way that is more
efficient & effective than competitors
• Different Types of Value
• Price
• Benefit
• Quality
• Value equates to clients perception of
benefits received versus costs sacrificed.
• Costs
• Monetary
• Search
• Psychological

Competitive advantage comes from
an organisation’s core competency
Combines in ways
competitors cannot
easily or quickly imitate
Able to be exploited
across the business
Ads value as perceived
by customer
Core
competency
Is a source of major competitive advantage
Can be defended for required period.
Can be applied across a wide range of applications

Internal capabilities enable our core
competency
Economic
Technological
Human
Management
Organisational
Assets, Financial Resources, Economies of
Scale, Brands, Customer Loyalty
Process, IT systems, Plant & Equipment
Skills attitudes and behaviour of employees.
Loyalty to organisation
Ability to coordinate and allocate capabilities.
Ability to make strategic choices and
implementation
The structures and systems people which
together comprise the organisational culture

The formulation of a strategic
position enables us to fill in the gaps
We are the
To
That
Because of
Our target market
Our core value
Our value proposition
Our capabilities

So…are we really measuring what will
enable our value proposition to be delivered?
Operational
Excellence
Product
Leadership
Customer
Intimacy
•Price competitiveness
•Availability
•Convenience/Speed of purchase
•Quality & consistency of products/services/processes
•Growth in customer base
•Share of Market
•First to market – Quality product development process
•High Performance product – Features & Functionality
•Marketing/Brand Awareness in Target Segments
•Customer referrals
•Share of Wallet of Target Segment
•Completeness of the solution – Selling multiple branded products & services
•Exceptional pre/post sales service
•Relationship length/customer retention
•Customer information
•Share of wallet of customer/customer profitability

Remembering that customers needs and
operational performance change over time
Cost
Dependability
FlexibilityQuality
Speed
Our perceived delivery Client Needs
Cost
Dependability
FlexibilityQuality
Speed
Time

Performance measures can involve
different levels of aggregation
Broad Strategic
Measures
Functional Strategic
Measures
Composite Performance
Measures
Generic Operations
performance Measures
Detailed Performance
Measures
High Strategic relevance
& aggregation
High diagnostic power
and frequency of
measurement
Overall Strategic Objectives
Market Strategic
Objectives
Operations
Strategic Objectives
Financial Strategic
Objectives
Customer
Satisfaction
Agility Resilience
Quality Agility Speed CostDependability
•Defections per
Unit
•Customer
complaints
•Time between
failure
•On time
delivery
•Product Range
•Time to market
•Order Lead time
•Throughput
time
•Transaction
Costs
•Efficiency
•Labour Costs
Source: Slack, Chambers & Johnson; Operations Management; Prentice Hall Pg 584

Customer
Perspectives
Financial
Perspective
Process
Perspective
Learning
Perspective
Vision &
Strategy
Process Perspective:
To satisfy our shareholders & customers
what business processes must we excel at?.
Customer Perspective:
To achieve our vision how should we appear
to our customers?
Financial Perspective:
To succeed financially how must we look to
our stakeholders?
Learning Perspective:
To achieve our vision how will we sustain
our ability to change and improve?
Translates the vision
through 4 perspectives:
Source: Kaplan & Norton; Using the Balanced Scorecard as a Strategic Management System, Harvard Business Review , January – February 1996
The Balanced Scorecard:
We have a tool to ensure we are
measuring what needs to be measured

We have a tool to communicate &
coordinate the company’s strategy
Translating
Vision
Feedback &
Learning
Business
Planning
Communicating
& Linking
Vision &
Strategy
Feedback & Learning:
Articulating the vision
Supplying Strategic feedback
Facilitating Strategic review & learning
Business Planning:
Setting Targets
Aligning Strategic Initiatives
Establishing Milestones
Communicating & Linking:
Communicating & educating
Set goals
Links rewards to performance measures
Translating the vision:
Clarifying the Vision
Gaining Consensus
Four Objectives:
Source: Kaplan & Norton; Using the Balanced Scorecard as a Strategic Management System, Harvard Business Review , January – February 1996
The Balanced Scorecard:

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