bowman’s strategic clock

Question 1

what does bowman’s strategic clock show?

Answer 1

• shows different positioning strategies based on different combinations of price (from low to high) and perceived added value or benefits (low to high).
• it shows that some positioning strategies are likely to be more successful than others

Question 2

what are the 8 positions on bowman’s strategic clock?

Answer 2

1) low price and low added value
2) low price
3) hybrid
4) differentiation
5) focused differentiation
6) risky high margins
7) monopoly pricing
8) loss of market share

Question 3

what do businesses offer in the low price and low added value position (position 1)

Answer 3

• offering the poorest quality products and the lowest price
• products that have short life cycles

Question 4

when is the low price and low added value position (position 1) useful?

Answer 4

in intense competition and price wars

Question 5

why must sales volume be high in the low price and low added value position (position 1)?

Answer 5

sales volume must be very high to compensate for the very low profit margins

Question 6

disadvantage of the low price and low added value position (position 1)

Answer 6

low quality often means no repeat/loyal customers

Question 7

what are the companies competing in the low price postiton (position 2)?

Answer 7

• companies competing in this category are the low cost leader. due to the large volume of sales, low cost leaders can become the market leader and force other businesses to be price takers

Question 8

in the low price position (position 2), why do companies have low profit margins?

Answer 8

businesses have very low profit margins because they force the prices down

Question 9

example of a business that is a low price competitor

Answer 9

asda

Question 10

what do businesses in the hybrid position (position 3) offer?

Answer 10

• they offer products at a low cost but offer products with a higher perceived value than those of other low cost competitors
• the quality and value is good and the consumer is assured of reasonable prices
• this combination builds customer loyalty

Question 11

what do companies in the hybrid position (postiton 3) build a reputation of?

Answer 11

volume is an issue here but these companies build a reputation of offering fair prices for reasonable goods

Question 12

example of a business that is a hybrid competitor

Answer 12

discount department stores