Strategic Position
Presenting the scope of your organization’s offering is important but it is not enough. The array of products, services and interventions you offer should reflect how you relate to your clients. This is known as your Strategic Position.
Most organizations, whether from the private or nonprofit sector, establish a strategic position for themselves early in their existence; that is, they determine the strategies they will use to attract their target clients and consumers and outperform their competition.
Understanding your organization's strategic position is vital when trying to introduce new products, services or interventions into an existing or new market. To ensure that the product, service or intervention they are funding is strategically appropriate for the organization, funders or investors need to see early in your business plan the organization's current strategic positioning.
According to Arnoldo Hax, Professor of Strategic Management at Massachusetts Institute of Technology's Sloan School of Management, and the creator of the Delta Model
, there are three potential strategic positions:
Although your organization may not fall cleanly into a single position, chances are that one of them best represents your central strategic focus. This is what you need to research and determine. It may well be that what you thought was the intended strategic positioning of your organization is, in fact, not the case.
Inside the Delta Model
Best Product or Service: An organization using this strategy seeks to increase its own value, either through volume of sales, priced affordably for a large market; or through the sale of high priced products and services that offer distinct features demanded by certain market segments. The success of such an organization is based on its market share; that is, on its ability to capture an increasing portion of the market that seeks either affordable, accessible products and services; or exclusive, highly priced products and services. Therefore, it must bring its product or service to market first and have the best packaging and delivery.
Total Client Solutions: With this strategy, an organization seeks to increase the client's value. This is done in two ways: reducing the clients' costs, and increasing the number of related products and services that are offered to the client. By offering a range of services and products (solutions) at a single point of delivery, a client is able to reduce the time and money spent seeking certain products or services. Likewise, by bundling or combining its products and services with support and follow-up, a client will experience both convenience and savings. This type of organization's success is based on client share; that is, on attracting and retaining clients throughout their consumer life cycle. Therefore, it needs to secure its clients, learn from them, and customize its services and products around their feedback.
Sector Lock-in: An organization with this strategy seeks to monopolize its sector. This is done by locking in, mostly through out-sourcing, high-quality partners who complement its products and services, allowing an organization to extend its own line of products and services, without having to invest in the development or maintenance costs. This strategy provides an organization with a competitive advantage, since complementors will adapt their products and services to those of your organization if they feel they will benefit. This type of organization measures its success by its share of complementary partners. It is critical for this type of an organization to develop proprietary standards (set the standard) and to keep out competitors.
The Product and Service Inventory Worksheet
Instructions: Read and complete the following steps.
- Click on the Product and Service Inventory Worksheet.
- Complete column 1 for both the "Products" and “Services" tabs.
- Fill-in the information corresponding to columns 2 thru 8 for both the "Products" and Services" tabs.
- The percent distributions of products and services across the positions of Best Product or Service, Total Client Solutions and Sector Lock-in, will be automatically calculated and appear at the bottom of the spreadsheet.
- Prepare a brief summary of your organizations strategic position for its products and services.