Selling Treadmills for Dogs

Understanding the Positional View in Business

Photo by Leo Rivas on Unsplash

In business strategy, the positional view holds that value is derived from two critical factors, 1) where a firm chooses to compete in a given marketplace, and 2) the defensibility of that position.

To choose where to compete a business should start by segmenting the marketplace. This involves identifying key differences among products and customers within a given industry. As a business you’re looking for an area of opportunity where your unique value proposition will allow you to capture market share.

As Porter notes, there are three major strategies a business can employ to position themselves. These include overall cost leadership, differentiation, and focus.

Using one or all of these strategies will enable you to effectively position your business in an area of the market where you can be most successful.

Once you’ve identified a white space on the map and planted your flag, how well can you defend your position from competitors? It may seem counterintuitive, but competition is a good thing.

If you’re the only one selling a treadmill for dogs you’ve either discovered a totally unserved customer (which is rare) or there is no market there.

That’s why effective positioning often means you’re bumping up against competitors. The question is, how well are you able to hold your ground? If Peloton sees your success and decides it wants to get into the treadmill for dogs game, how will you fend them off? What’s special about your company or product that makes it not easily replicable or substitutable? Answering these questions is the key to defensibility.

The value of effective positioning is evident in the extent to which a business is able to garner significant traction and retain customers, all while remaining profitable.

There are three metrics you can use to measure the effectiveness of your strategic positioning.

As a Design Strategist I am ever curious about people, culture, and technology. I spot trends, uncover connections, and tend to think A LOT about the future.