This question contains two parts; be sure to answer both. First, summarize the three sources from which strategic position emerges, providing an example of a company with each strategic position. (You will be providing three examples.) Second, select either McDonald's or Apple Computer and discuss the company's strategic position.

Question

What will be an ideal response?

Answer 1

Strategic positioning attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company. It means, according to Michael Porter, "performing different activities from rivals, or performing similar activities in different ways."

Strategic position emerges from three sources:

(1) Few needs, many customers: A strategic position can be derived from serving the few needs of many customers. Example: Jiffy Lube provides only lubricants, but it provides them to all kinds of people with all kinds of motor vehicles.

(2) Broad needs, few customers: A strategic position may be based on serving the broad needs of just a few customers. Example: Wealth management and investment advisory firm Bessemer Trust focuses exclusively on high-net-worth clients.

(3) Broad needs, many customers: The strategy may be oriented toward serving the broad needs of many customers. Example: National movie theater operator Carmike Cinemas operates only in cities with populations of fewer than 200,000 people.

McDonald's strategic position stems from few needs and many customers. The overall "need" is a meal, whether breakfast, lunch, or dinner. It serves all kinds of people, of all ages, in many different locations across the country (and across the world).

Apple's strategic position stems from broad needs and many customers. The overall "needs" in this case is a wide range of electronic devices for personal and workplace use and entertainment. Apple serves the needs of many customers around the world; it has one of the world's two dominant operating systems (the other is owned by Microsoft).