Competitive positioning strategies mirroring sellers’ and buyers’ perceptions?

Abstract

Questions are raised about the conventional, rational model of developing a competitive positioning strategy, in particular managers’ reliance on large amounts of information. It is argued that managers simplify their understanding of the competitive environment using mental models, based on a low number of firms, grouped to reflect their similarity. Doubts are raised about the extent to which suppliers’ and buyers’ perceptions of the competitive environment concur. Interviewing managers supplying oil pumps, along with contractors and end users, showed they all considered the competitive environment as consisting of a low number of firms. All simplified their appreciation through a categorization process, using a low number of evaluative dimensions to group similar competitors. Differences were consistently seen between suppliers and buyers. To develop more effective positioning strategies suppliers should surface their assumptions about competitors and compare these against buyers’ perceptions.

Keywords:

• competitive positioning
• suppliers’ versus buyers’ perceptions

^∗Now at The Open Business School, Open University Walton Hall, Milton Keynes, UK.

^∗Now at The Open Business School, Open University Walton Hall, Milton Keynes, UK.

Notes

^∗Now at The Open Business School, Open University Walton Hall, Milton Keynes, UK.