Corporate Competitive Positioning within a Changing Environment

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Corporate Competitive

Positioning within a Changing Environment

The University of Hull

Masters of Business Administration

June 2005

Assignment title

Hooley, Broderick and Möller claim that,

‘The competitive position a firm chooses to occupy is a combination of its choice of target market and the differential advantage it is seeking to create as a means of securing that market.’ [Hooley G., Broderick A. and Möller K., Competitive positioning and the resource-based view of the firm, Journal of Strategic Marketing, 6, pp97-115 (1998)]

Critically discuss what they mean by this statement, with reference to alternative viewpoints, and attempt to explore the value of the resourced-based view of competitive advantage described in their approach when applied to assess the competitive position of a company with which you are closely familiar.  

Table of Contents


The Strategic Concept and Development of Marketing        

Marketing Management in Contemporary Perspectives        

Market Segmentation        

Market Positioning        

The Competitive Advantage        

The Resource-Based View of Firm        




Firms are constantly striving to survive. The difficulty stems not from the severity or inevitability of the struggle, but rather from the changing terrain of the battleground. Change is imposed by a complex set of factors ranging from a demanding customer whose expectations are insatiable to technological advances and an ever intensifying competition within industries. It is no win-win struggle; that is why it touches the chord of strategy in the organisation, yet one which requires the involvement of all resources and functional units for greater synergy and better effectiveness.

Against this backdrop, the present paper studies marketing strategy of firms and the factors that have bearings on the creation of such strategy. A literature review is conducted to formulate a solid frame of reference through which the contemporary theoretical threads of the marketing strategy can be understood. A great detail is devoted to the processes by which firms occupy specific positions in the market. The approach commonly followed to understand these processes is either on the macro or micro level of marketing. Positioning, for instance, is usually studied in the literature either on the operative instrumental level (Kotler, 2003) or the strategic decision level (Hoffman, 2000). Yet, this paper shows that such approaches, rigorous though they are, will only lead to over-simplified assumptions about a quite complicated reality.

The paper therefore builds on the historical development of marketing strategy and the analysis of its current situation to propose a holistic view of the marketing strategy of the firm. The proposed model is shown to disentangle the apparent contradictions found in the most of the present marketing literature, with particular reference to the competitiveness and the resource-based view (RBV) of firms. Hooley, Broderick and Möller (1998) tried to forge a strategic relationship between market-orientation and the RBV through the competitive positioning of firms. Although this might seem useful in understanding the performance of a firm in a historical, static point in time, it certainly falls short from accommodating future developments in marketing such as the increasing emphasis on social orientation of marketing and the tendency to benefit from a globalizing economy. For instance, Auken (2001) demonstrates that globalisation requires a new thinking focusing on the potential strength of the collaborative relationship to promote resource advantage. It might be worthwhile in this respect to mention both the horizontal collaborations, or alliances, and the vertical ones, or partnerships.  

Finally, the paper identifies a range of future research areas that might warrant serious consideration.

The Strategic Concept and Development of Marketing

In the past, marketing focused on the product and hence the term product-orientation marketing came to the fore (Bennit, 1988; Keegan, 1995; Doyle, 2002). During this time, which precedes the early 1960s, marketing was preoccupied with the mass production and the craft of getting prospect customers to buy the firm’s offerings. In this framework, little or no attention was paid to the customers (Doyle, 2002); instead, the management was more of the opinion that production efficiency in terms of technological advances and cost-effectiveness could better position the product and therefore result in the required profitability of the organisation. The logical consequence of this focus was a huge inventory of a firm’s product. Such inventory led to the aggressive selling manifested in the management emphasis on advertising and sales promotion.

In 1960, however, the famous Harvard Business School professor, Theodore Levitt made a real departure from this short-sighted understanding of marketing. In his seminal article, Marketing Myopia, Levitt (1960) framed a simple and convincing model that the marketing effort of organisations should focus more on the needs of the buyers than on the whims of the sellers. He built his reasoning on the failure of the US railroads to grow because they defined their business in the wrong way. Instead of thinking of their industry as a transportation business, they took the railroads as their business. The ultimate failure to compete was inevitable.

Levitt’s view has proved to be a paradigm shift in the marketing strategy. For it entailed adjusting the entire organisation to be customer-oriented through value creation, with a range of policy options accompanying such move. Indeed customer-orientation comes quite consistent with the widely approved statement advocated by Peter Ducker (1977) that the purpose of marketing is to make selling redundant. That is, if a firm’s offering is based on the real needs of prospect customers, such a firm does not aggressively push for selling.

Nonetheless, customer-orientation does not accommodate the broader concerns of the firm’s stakeholders. Producing cigarettes may be a case in point. Cigarettes may be produced to the best of the customer’s needs and favourable taste, yet they have proven harmful to the health of the end-users and therefore detrimental to the society. This formed a valid point of entry for the societal marketing orientation that adds the dimension of the society’s well-being to the marketing philosophy (Bennit, 1988). In line with this orientation, a firm has to take consideration of all its stakeholders – consumers, owners, the public and the employees.

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In spite of their different approaches, all these threads of thinking agree on their pursuit to define the purpose of marketing in the firm. The marketing literature generally concurs that the essence of marketing is the creation of customer value. Keegan (1995) proposes a simple value equation showing that customer value is the outcome of the perceived benefits divided by the price. The validity of the equation stems from the proposition that customer value can be increased by increasing or improving the benefits of the product or service, by reducing the price or a combination of both. That means that ...

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