Building strategic differentiation: The top priority of industry leaders
www.quadric.dk
Copyright © Quadric® 2009
Differentiation was once a choice of strategy, today it needs to be part of any strategy
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Differentiation guides decisions
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Volvo owns ”safety,” BMW owns ”the experience”
For life.
The ultimate driving machine.
Positioning statement
Operational evidence
Leadership in: Combining performance, style
and luxury Superior engineering
Leadership in: Safety systems innovation Superior crash test performance
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UPM owns ”continuous improvement,” StoraEnso owns ”innovation”
We lead. We learn.
What paper can do.
Leadership in: Product range R&D pushing the boundaries of paper Promoting new applications
Leadership in: Customer relationship management Quality improvement programs Wood tracking and certification
Positioning statement
Operational evidence
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Industry leaders add strategic differentiation to traditional business strategy
Traditional business strategy
Industry leadership =
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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Traditional strategy is developed and managed through the organization
Traditional strategy
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”Strategic differentiation” is developed and managed across the value chain
Strategic differentiation
Suppliers Distributors Dealers/ retailers
Influencers End-users Company Investors
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This requires changing management priorities, not organizational structure
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Developed and managed through the organization
Developed and managed through the value chain
Traditional business strategy Strategic differentiation
Suppliers Distributors Dealers/ retailers
Influencers End-users Company Investors
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Company Suppliers Distributors Dealers/ retailers
Influencers End-users Investors
Manage your value chain, not just your company
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Company Suppliers Distributors Dealers/ retailers
Influencers End-users Investors
Each interaction across your value chain is influenced in four ways
Emotional
Rational
Internal
External
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Emotional
Rational
Internal
External
Emotional
Optimized Brand Portfolio
Rational
Operational Evidence
Inte
rnal
Cultural Uniqueness
External
Aligned Marketing
Positioning Strategy (True, relevant, high-
value focus)
Your positioning strategy guides decisions
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Company Suppliers Distributors Dealers/ retailers
Influencers End-users Investors
Use positioning to increase marketing effectiveness, driving volume and pricing
Pull Push
Drive volume & pricing
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Company Suppliers Distributors Dealers/ retailers
Influencers End-users Investors
Use positioning to guide branding and communications, influencing future trends
Pull
Influence future trends
Pull Push
Drive volume & pricing
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Company Suppliers Distributors Dealers/ retailers
Influencers End-users Investors
Use positioning to guide innovation by development teams and partners
Pull
Influence future trends
Push
Guide innovation
Pull Push
Drive volume & pricing
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Company Suppliers Distributors Dealers/ retailers
Influencers End-users Investors
Use positioning to integrate past and future acquisitions
Pull
Influence future trends
Push
Guide innovation
Pull Push
Drive volume & pricing
Integrate acquisitions
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Suppliers Distributors Dealers Influencers End-users Investors
Volvo uses positioning to manage their value chain, not just their company
Pull
Influence future safety trends
Push
Guide safety innovation
Pull Push
Drive volume & pricing of safety
Volvo is systematically building strategic differentiation
Safety (life)
Corporate values Quality, Safety and Environmental Care
"An automobile is driven by people. Safety is and must be the basic principle in all design work.“ – Volvo founders, 1939
First three-point seat belt First rear-facing child safety seat First three-point seat belts in rear seat First inertia reel seat belts First seat belt reminder First bulb failure warning sensor First child booster cushion
First wide-angle mirror First centre seat belt First side impact protection system (25% reduction in fatalities) First airbags for trucks First side protection airbag (SIPS bag) (another 25% reduction in fatalities)
Leading the industry in safety innovation
“Whether you’re starting a family or creating one as you go.”
Volvo V50 Volvo V70
Volvo S40 Volvo S60 Volvo S80
Volvo XC70 Volvo XC90 Volvo C70
Volvo’s Quadric C
opyr
ight
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Industry leaders could make many claims, but choose to build focused positions
Product leadership?
Service leadership?
Innovation leadership? Position
Reliability
Empowering people
Safety
Performance
Simplicity
Driving change
Problem solving
Yes
Yes
Yes
Yes
Yes
Yes
Yes Yes Yes
Yes Yes Yes
Yes Yes Yes
Yes Yes Yes
Yes Yes Yes
www.quadric.dk
Copyright © Quadric® 2009
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