Strategic positioning

Examles of Competitive Advantage Strategy

1000 liter capacity liquid containers are used for temporary storage during transport between or within factories in the food and cosmetics industries. As their capacity is in between that of an 18 liter drum,200 liter drum cans and over 20,000 liter tankers, they are generally known as IBCs (Intermediate Bulk Containers). There are two types – one that directly fills the tank, and one that fills a disposable bag (liner) inside the tank. Directly filling the tank requires it to be cleaned frequently and seeing as it is not disassembled, the transport cost is high and significant space is required to store it.

On the other hand the container that has a disposable liner bag doesn’t require cleaning, and the outer structure itself can be folded down when not in use, allowing transport and storage costs to be reduced. “S” company decided to start renting out these IBCs instead of selling them outright. At the time, the market didn’t understand the merits of this, but slowly the rational and convenience of the idea began to take hold. This created a new market segment i.e. the rental – liner IBC. In order to enter this market, companies need to have both foldable containers and liner bags for the inside – a unique combination of hardware and the soft skills and infrastructure to allow for rental operations. The establishment of this positioning meant that they had no competitors, and experienced fast growth and continued higher profits. (Positioning A)

PositioningA PositioningA

However, competitive advantages do not last forever. Challengers started appearing from the bottom left cell. In this case, it is necessary to introduce another new axis to create positioning that has a new competitive advantage. A new competitive advantage is created by offering a wide range of solutions such as a nationwide one way rental system that allows for rental and return at a local depot, a system that allows for sterilized filling and discharging, equipment that works with highly viscous material etc. Thereby dividing the cells on a new axis. (Positioning B)

The key is considering how to separate your company from the others, and ensure that your company has an isolated presence that shines bright in the industry. Competitive advantage positioning allows you to have the power to decide on pricing – ensuring higher profit margins for many years.

PositioningA’ PositioningA’
PositioningB PositioningB

For further details(the MBA dissertation)

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How to design your own strategic positioning(in japanese)

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