14. Juni 2010
Open a window to one’s mind
erschienen in The Communication Journal Juni 2010
A company’s positioning vis-à-vis the competition and a focus on the characteristics that set it apart are key success factors in today’s challenging market environment. Prof. Dr. Maurice Pedergnana, Professor for Banking & Finance at the Lucerne University of Applied Sciences and Arts, comments on the relevance of a company’s unique positioning for its sustainable development by highlighting selected best-practice examples.
Whilst a ‘positioning process’ comprises an entire set of corporate initiatives to create an image or identity in the minds of an organization’s target groups, a ‘re-positioning strategy’ involves adjustments to a changed market environment or new customer needs, e.g. after crisis situations. Therefore, the definition and implementation of a unique market position is a vital success factor in order to become No. 1. Relevant aspects are:
Truly original and non-imitable value proposition
The challenge starts in me-too market environments; in other words, in markets crowded with competitors. ‘More of the same’ is rarely a viable concept for a sustainable business unless you can attract customers through a compelling marketing campaign. Creating long-term shareholder value requires a focus on individual strengths enabling a company to offer a unique value proposition. This may be a longstanding heritage in a certain market sector combined with profound expertise or privileged access to certain raw materials, for example. Such competitive advantages can apply to big and small businesses, such as Etter, the Zug-based distiller of cherry brandy, now run by the fourth generation of the founding family and offering more than 400 specialties.
Focused business model rather than radical changes
Entering a new business segment or even a neighboring market is a risky undertaking. The ‘Allfinanz’ vision is an example of how many big financial players failed. It is extremely important to remain true to existing strengths, knowing where the company is coming from and what its skills are. While there is an undeniable economic need for continual modest extension and diversification of product offerings in order to adapt to changing consumer needs and to maintain a leadership position, the scope and timing of such expansion and innovation must be well thought out and companies must address closely related markets or customer groups while doing so.
Strong brand as a competitive advantage
An effective positioning initiative takes advantage of additional communication elements at the corporate level such as reputation and brand management. Brand value is especially vital to a company’s successful and sustainable development. Therefore, brand building in people’s minds – consciously or unconsciously in the minds of existing and potential clients – is a priority task facing every management team and it is most effective if it is implemented in a consistent way. Whilst the sponsoring of Formula One car races and huge donations to WWF as done by HSBC do not really fit together, Apple leads the way in synchronizing our way of life and our lifestyle with its core value propositions.
Best practice positioning examples
| HOLCIM, the Swiss-based cement company and a No. 1 global player, acts in the cement industry with a convincing, long-term strategy, optimizing financial, ecological and social performance. This approach helped the company to weather the economic downturn. An additional smart decision was to stay away from overly expensive M&A transactions during the years of easy financing. Holcim proved to be an industrial leader thanks to its consistent long-term strategy execution, including the introduction of long-term incentive plans, e.g. 10 years for top management level.RABOBANK, the Netherland’s equivalent of the Raiffeisen Banking Group and No. 1 worldwide in financing the food and agriculture industries, centers its strategy successfully around its core competencies, the financing of ‘Food & Agribusiness’, where it serves 10 million clients in 50 countries. It applies the same sustainable and autonomous growth approach with a reasonable long-term ROE goal of 8% at the companies it acquires, such as Sarasin, the fastest growing private bank in Switzerland, and SPG Sustainable Performance Group, an innovator in the field of sustainability and finance.SWISS RE, the Swiss-based global reinsurer with focus on risk transfer, risk retention financing and asset management, has a middle management with a proven reputation for innovative reinsurance and risk management solutions that understands and meets client needs. These experts helped to correct the fundamental mistakes (when the company began to focus on growth through acquisitions and eyes were focused on investment banking and when the board appointed a CEO with no experience in property casualty, which is Swiss Re’s traditional core business) that senior management had made – and for which it was never held accountable. |
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