strategic differentiation

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

Cop

yrig

ht ©

Qua

dric

® 2

009

3

Differentiation guides decisions

Cop

yrig

ht ©

Qua

dric

® 2

009

4

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

Cop

yrig

ht ©

Qua

dric

® 2

009

5

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

Cop

yrig

ht ©

Qua

dric

® 2

009

6

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

Cop

yrig

ht ©

Qua

dric

® 2

009

7

Traditional strategy is developed and managed through the organization

Traditional strategy

Cop

yrig

ht ©

Qua

dric

® 2

009

8

”Strategic differentiation” is developed and managed across the value chain

Strategic differentiation

Suppliers Distributors Dealers/ retailers

Influencers End-users Company Investors

Cop

yrig

ht ©

Qua

dric

® 2

009

9

This requires changing management priorities, not organizational structure

+

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

Cop

yrig

ht ©

Qua

dric

® 2

009

10

Company Suppliers Distributors Dealers/ retailers

Influencers End-users Investors

Manage your value chain, not just your company

Cop

yrig

ht ©

Qua

dric

® 2

009

11



Each interaction across your value chain is influenced in four ways

Emotional

Rational

Internal

External

Cop

yrig

ht ©

Qua

dric

® 2

009

12

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

Cop

yrig

ht ©

Qua

dric

® 2

009

13



Use positioning to increase marketing effectiveness, driving volume and pricing

Pull Push

Drive volume & pricing

Cop

yrig

ht ©

Qua

dric

® 2

009

14



Use positioning to guide branding and communications, influencing future trends

Pull

Influence future trends

Pull Push


Cop

yrig

ht ©

Qua

dric

® 2

009

15



Use positioning to guide innovation by development teams and partners

Pull


Push

Guide innovation

Pull Push


Cop

yrig

ht ©

Qua

dric

® 2

009

16



Use positioning to integrate past and future acquisitions

Pull


Push

Guide innovation

Pull Push


Integrate acquisitions

Cop

yrig

ht ©

Qua

dric

® 2

009

17

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

© Q

uadr

ic®

200

9

Cop

yrig

ht ©

Qua

dric

® 2

009

19

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

strategic differentiation

Documents